May 23, 2007

What's the difference between mortgage brokers and vultures?

You're seeing the tip of the iceberg folks. So much will come out over the next few months about the out-of-control-and-unregulated mortgage broker profession, we'll all wonder how this happened without being exposed sooner.

You're going to be sickened. You're going to be shocked. And you're not gonna be surprised.



area 51 said...

What? You want me to feel sympathy for the DeWittlesses? The only thing that makes me sick is how stupid his wife was. I guess I missed the part about the gun being held to her head. "Here, sign this paper, it means you promise to have a big rod shoved up your a**., OK, you pressured me so much, where do I sign?" Oh, woe is me, please feel sorry for me....

Anonymous said...

Vultures don't stink as much.

Anonymous said...


Dow hits anothe records. And you tools are invested in 5% CDs.

Anonymous said...

O.k. sure the broker was a dick, but come on people JUST SAY NO.

I mean use you common sense, if the deal can't wait until after the surgery its gotta be a bad deal.


Anonymous said...

A random comment here... I sold my south bay (san jose) town house in march of this year. I believe that we are in a seminal down turn in CA REAL but, still, it has been a bit unnerving to watch the 7 other listings in my neibhorhood come out with asking prices significantly higher than my selling price ( ~ 7% higher). Well, I've finally convinced myself it was the right move. 6 out of 7 of the other places have not moved (with the oldest listing going back to Nov 06).
We're moving to Santa Cruz and posted a craigslist, looking for a home to rent. Went to a woman's house yesterday in SC who was ABSOLUTELY desperate to sell. She called us in a last attempt to find a way to keep her house by renting it. She has no reasonable offers, doesnt want to take the 10% to 15% "low ball offer" that someone is bidding. I think she is the canary in the coal mine. The selling season in basically over and now the desperation is coming out. I saw it 1st hand yesterday...prediction for bay area realestate:

The median price which has worked nicely to hide the fact that the market here is dead will now turn around and show how bad it really is. Now that the 'good' buyers have come in and cherry picked what they wanted, what you have in the bay area is all the other properties (a bloated inventory by bay area standards) that still have 'bubble' asking prices. The compromises will now come, and you will see big yoy drops in median price in the coming months now that the full price offers dry up and sellers start taking "low baller" bids...The median is a double edge sword. Wonder how CAR will spin it...hehehe. popcorn time!

Anonymous said...

Don't both spouses need to sign loan docs? Something tells me the story has changed a little bit in the last two years.

Anonymous said...

Vultures have ethics

Anonymous said...

Why is it that the main stream media doesn't issue public service announcements about crooked mortgage brokers .The MSM likes to quote people stating where the next big real estate boom location is ,but never warnings about lenders/realtors .

How about just publishing a list of what to do and what to watch out for . For instance ,

(1) Never go to a mortgage broker your realtor suggests .
(2) Always put in you sales contract that you offer is subject to obtaining financing not to exceed XY and Z.Also make offer subject to property appraisal and home inspection and make sure you choose the parties doing the inspections (including the appraisal )

(3) When you apply for a loan you should get a Truth in Lending read out within a short time .Tell the mortgage broker that you have other loan applications submitted so if they change the loan terms at the last minute, claiming you didn't qualify, you have a back up (and you can cancel your purchase contract.)
(4) Ask for the loan documents a week ahead of time so you have a chance to tell the sharks to go to hell . Ask to review your loan application and get a zerox copy and dispute anything untrue .
(5) Go to a direct lender if you can .
(7) Make you offer subject to review of the lenders appraisal and your approval of it .
(8) Read all the loan documents and understand if your going on a adjustable what you index is , what is the margin that determines your interest increases ,how often does the interest rate adjust verses how often the payment can be increases .Pay no attention to the teaser rate ,it only lasts for a short time .Don't go for a loan that has a pre-payment penalty .
(9)Find out what is the max rate your loan can adjust to and determine if that is a payment you can afford based on no more than 30% of income and all debts not to exceed 35% of income .
(10) In a interest increasing market try to go on a real fixed rate loan so you have fixed costs and you can build equity .
(11) Flipping property is a dangerous game with property values on the decline ,so know what your doing .
(12) Know the neighborhood your buying into and make sure you research all recent comps ,not just the ones your real estate agent shows you .Just because a seller reduces a prices doesn't mean the seller is at market vlaue yet.
(13)If you have a house to sell and you simply must buy another before your house sells make sure you make the offer subject to your home selling and closing escrow .Better to sell your home first so you know how much money your going to have .
(14) Don't put alot of expensive improvements into your house in a declining ,tight money market ,in order to sell ,because you won't re-coup the money in a declining market. Better to sell for cheaper and have more of a buyer pool who can qualify .
(15)Don't buy in a area that has to many investors because at some point they will all dump and at the same time driving the prices down ,(especially flippers )
(16) Dont deal with a real estate agents that suggests that you inflate your appraisal so you can give cash back to the buyer to make a sale .
(17) If you buy into a new home tract make sure the community improvements are completed and you have enough long term owner-occupied buyers to support the HOA.
(18)Buy usually for a long term holding of the property and don't believe that real estate always goes up . If your buying a rental property make sure the local rents will cover your debt on the property .
(19)Understand that money is not always available in the market, so do not accept realtors and loan agents telling you you can just refinance down the road into a better loan because you might be stuck with that loan.
(20)Never trust the words "trust me "
(21) If you can't get the terms you want on a purchase ,walk . If your told there is a bidding war on a property ,walk .
(22) Dont buy now based on talk of it being the bottom of the declining prices .It's likely that you can get a even better deal in the future with this huge supply of homes that needs to be sold .

I could go on and on , but how come the public never gets advice on how to protect themselves ?

Anonymous said...


That's just a photo of a gathering of realtors at a FSBO open house

turdly said...

Vultures circle the dead and eat them, and they are just like lenders. Brokers however have food run to them proclaiming "let me lie in every possible way it will take to destroy myself and my family in the very near future!" "Let me lie or I'll sue you for discrimination!" "how dare you ask how much I make, the 6 brokers before you tried that and I'm suing them!'. 'Kill me and mine slowly you broker devil!'

But really. the difference is; vultures eat dead things. Brokers feed garbage to garbage eaters.

turdly said...

Hey! I know that Zebra! She's that pet store employee that told her broker she made 100k a year!
Everyone preys on prey.

Anonymous said...



edd said...

Why is Countrywide still issuing double (piggyback) mortgages for zero-down without PMI ?

Who underwrites this ?
Self-insurance on speculation ?
High 'appraisal' ?
Maybe cash under the table ?

I just examined a deed and double
mortgage with no indication of PMI,
sold 95% of list, and no down.

az_mtb said...

Phoenix area builders move homes by taking trade-ins

Bitter Renter said...

I really hate a "blame the victim" mentality but I have to point out that these people were swept up in the greed-based culture of ostentation and pretense by trying to attain a level of living they could not afford even BEFORE the husband got sick. I see this all the time, people who want to BE the Joneses much less keep up with them because to many, anything less is not a life worth living. Then they run into trouble and want us all to bail their lousy asses out.

Sorry, but the term "dream home" is even a little disgusting.

PETA said...

Vultures have a soul

Adam Smith said...

What's the difference between mortgage brokers and vultures? The vultures wait until you're dead to pick the flesh off your bones!

People forget that mortgage brokers are SALES PEOPLE, who are paid by commissions (which may not be disclosed to consumers, hidden in the form of a 'yield point spread': fancy word for commission).

Worse part, though, is that the commission they make is typically larger the HIGHER the rates they can get you to accept! Do NOT, for one minute, think a mortgage broker is your friend, or trying to protect YOUR interests or get you the best deal!

Yet another example of how Bush's theoretical love for "let the free market regulate itself without regulation or oversight" have corrupted our nation's economy with Ponzinomics and pyramid schemes, intent to screw the consumer in the name of seeking one's sales commissions.

Anonymous said...

Lawyers did this same thing years ago and a code of ethics was developed to prevent it. There is no code of ethics for sales people/brokers like this but there are laws on the books regarding contract formation which might void contracts made under these circumstances. Looks like this guy was preying upon an unsophisticated party at a time of weakness and got paid!! Which is all the brokers care about regardless of how much s/he is really destroying the lives of others financially and otherwise.

ScottHayne said...

Yup, there is a LOT of slime out there, but this story has a little pass-the-buck-itis. Anyone who would think about visiting anyone at a hospital to sign any document other than a will should probably be made to participate in a dog fight. But as for this situation, did they close the loan at the hospital? Hmmmm....

serindippity said...

The Fed is intoxicated on its own Greenspan flavored coolaid:

U.S. regulators have been under fire for not better protecting borrowers who have been hurt in the subprime mortgage markets, where delinquencies have soared. The Fed is looking at the issue and will hold hearings on June 14, but Kroszner made plain that there was a balance to preserve

"Any new rules should be drawn clearly to avoid creating legal or regulatory uncertainty that could have the unintended consequence of restricting consumers' access to responsible subprime credit," he said.

That's ALWAYS what the big banking or securities industry says when there's the threat of actual regulation which might hurt its profits.

Translation? "Unless we get two witnesses testifying under oath and color-high-def video of the perp actually explicitly intending to commit and then actually committing a felony (and of course agreeing in writing to be videotaped so evidence is admissible)......go ahead and do whatever you want boys!"

They care about bank's access to highly profitable and yet vulnerable consumers---to endebt them forever, meaning the banks become a rentier class taking much of the earnings of the masses. China has 50% savings rate---US, soon -50%?

Subprime loans to get people through the electricity bill---OK, that's survival for some.

But why on earth do we need subprime MORTGAGES? Who ordered THAT? For a capital asset which lasts decades and a key part of the economy it is insane!

Of course the bankers know that it means higher and higher house prices which means that even prime mortgagers have to pay more and more of their paycheck to the banks.

Anonymous said...

Vultures only prey on the dead, for one.

Anonymous said...

Anonymous said...
Don't both spouses need to sign loan docs? Something tells me the story has changed a little bit in the last two years.

May 23, 2007 3:00 PM
Yes, if it was purchased in both their names. But she might of had a medical power of attorney to act on his behalf while he was incapacitated.

Also, he might have "ratified" the contract after he recovered by either signing later (express ratification) or by obtaining/enjoying the benefits of the contract (implied ratification). If its the latter form of ratification its odd/ironic that the benefit he enjoyed was bankruptcy.

Anonymous said...

Anonymous said...

Dow hits anothe records. And you tools are invested in 5% CDs.

May 23, 2007 2:37 PM
You can spot them a mile off!!

Anonymous said...

Too bad the FB's don't have any money to invest in stocks because they are spending 60% of their gross income on mortgage payments.

Anonymous said...

Found this posted on another blog...

From the NY Times:

The Battle for a Mortgage

AS homeowners across the country have dealt with the declining values of their houses and their ballooning mortgage payments, most New Yorkers seem to believe that the market here doesn’t play by the same rules.

But in recent weeks, a growing number of New Yorkers, often with six-figure salaries and reasonably good credit, have begun to find that mortgages are harder to get as lenders try to stem losses from loans to the weakest, or subprime, borrowers.

While mortgage brokers insist that most buyers in New York can still close deals, they also warn that people with any red flags on their mortgage applications will face delays and will pay higher fees. Potential problems include low credit scores or high credit-card balances or listing a suspiciously high salary for a given job.

“You’re going to pay the piper for any little mistake,” said Melissa Cohn, the president of Manhattan Mortgage Inc. She said her brokers — who last year arranged more than $3 billion in mortgages, mainly in New York City — were spending twice as much time on each application as they did a month ago because of new lending requirements, and she expects the situation only to get worse.

“The impact is going to be much greater as banks demand that people have clean credit to get the best mortgages,” she said.

“About three weeks ago, I would have gotten this done by snapping my fingers,” said Mr. Eisenberg, who is the executive vice president of the EFI Capital Corporation, a mortgage brokerage based in Garden City, N.Y. “Now it’s a very lengthy and time-consuming process where every bit of paperwork has to be done to the T. The guidelines are literally changing every hour.”

Until recently, many New Yorkers found it fairly easy to get mortgages. Then banks that made loans to subprime borrowers started running into trouble when the borrowers found it impossible to pay their mortgages and fell into foreclosure. As a result, banks have cut back on all types of loans.

“Lenders are going to scrutinize borrowers more carefully” in the next six to nine months, said Doug Duncan, the chief economist at the Mortgage Bankers Association in Washington. He added, “The pendulum is probably going to swing too far in the other direction before it settles.”

Anonymous said...

Why does Reuters think I want to read and watch a video at the same time?


area 51 said...

Bitter Renters Stand Tall!
Bitter Renters Represent the Smart Money!

Executive VP of Pimco rents!

"In a report issued this month titled "Still Renting," Kiesel said he remains convinced that he made the right decision to sell his house in early-2006, after owning a home for eight years."

Anonymous said...

anon 2:44:

I'm in the same boat. Sold my Las Vegas home 3 months ago. 5 new listings ranging from 3% to 5% higher than my selling price in the old subdivivsion since then. When I first saw that I thought fuck did I made a mistake selling for what I did? But none have sold. In total there are 12 for sale in a subdivision of 96 homes. Of the 12, 5 are bank owned. My sale is the last one recorded. In 2005 and even the first half of 2006, 1-2 sales a month was the norm. This is going to be sooooo ugly, I thank my lucky stars I got out when I did.

Anonymous said...

Spain is gonna crash 1st !!!!
neener neener neener

Anonymous said...

Poor Zebra! Must have gotten one of those no doc, stated income loans.

Anonymous said...

The "22 Point Buyer's Public Service Announcement" is absolutely the bomb! It takes things even further than the "Center for Responsible Lending" and just makes sense!

A lot of RE True Believers want to make this "all about price" (and to a much lesser degree that IS true). However as I have always stated my election to be a renter over the last 3 years has had a HELLUVA LOT more to do with an out and out refusal to participate in a rigged game!

Hit the number appraise-whores, slimy and un-regulated mortgage brokers and of course a NAR that always saves the best listings for their own members!

So the next time some brain-washed "real estate as a religion" idiot gets in your face calmly explain that "price" is the net result of a crooked system and until THAT end of the industry gets fixed you won't be attending any open houses soon. Then explain it's for their own good!


Anonymous said...

Of course the Pimco VP says he made the right call. What's he gonna say, he fucked up? The fact he rents is about as relevant as the fact my dog thinks a tennis ball is the world's greatest invention.

Anonymous said...

Anon2:44 and Anon7:03
I'm a third. We sold our San Jose place in late 2005 and have been renting a great house in one of the best neighborhoods since then. Do I sweat the difference? No, as said before by others much wealthier than I, "I made all my money by selling too early".

Anonymous said...

They are similar. I know of one lame broker who wears too much Axe Body Spray, ugly pleather jackets and owns a Koi Pond (that's fish you know).

burn baby burn said...

Vultures actually serve a purpose.

Anonymous said...

To the 2 posters above who got out just in time (in SF and Vegas):

Congratulations. It did feel like early spring '07 was about the last time to sell a house anywhere *near* bubble prices.

So my friends here in the PNW just decided to put their homes on the market this June. What are you gonna do? They had a year to figure it out.

I'll just pray for patience as I spend the next six months listening to them whine about how their house "won't sell".

Until they finally understand "It's the Price, Stupid".

Got popcorn?

Anonymous said...

"They are all carion who accepted those toxic loans and the predators feed well"

Anonymous said...

Vultures don't eat their own feces.

Anonymous said...

I just found your blog and you are right on the money..

I been telling my neighbors the same thing for the past 4 years, and people never though it will end..

Now a lot of people won't recover from this, and I think this time is worse than previous Housing crashes, because prices went up so much without really any reason.

Like here in Norwalk, CT what justifies that the average price of a home went up like by 130 % in the past 5 years?

What has changed around here?

Well there are two new Wal-Mart's and a few other bars in Washington Street and the traffic is worse than ever..

I get it a little bit in some places in Florida, where you even write about the insurance nightmare awaiting people, that if there was a few houses and only a lake fill with critters and now they have parks and complete shopping malls-all new, that the houses should go up a little...

But in most cases it was just speculative, and now that the music stop people will be hurting real bad.

Ah, and let's not forget the Brokers/ Real State Agents..they had a lot to do with this mess..

Like there is a flier in Norwalk, in Spanish, that reads like; "find out how much your neighbor house went for".

So if an idiot paid a lot for a home, without much fundamental to justify the price, that this means that you should also follow suit.

devestment said...

The difference is, that mortgage brokers pretend to be something they are not, while vultures maintain their integrity. A vulture provides a valuable service in that it cleans up a mess while at work. A broker actually creates a mess while working

Anonymous said...

At least vultures have a purpose!

They pick the flesh off the dead and dying and the unfortunate....

......isn't that the new tag line for the NAR?