October 22, 2007

HousingPANIC Stupid Question of the Day

Courtesy of Morgan over at BlownMortgage. Damn good question. Wonder if Chris Dodd, Hillary Clinton, Chuck Schumer and the rest of the idiots calling for interest rate freezes and housing gambler bailouts ever stopped to consider such a thing.

"If you lied on your loan application why is the lender supposed to bail you out with a loan modification?"



26 comments:

Anonymous said...

Liars deserve to lose their homes

Anonymous said...

Anonymous said...

Liars deserve to lose their homes

October 22, 2007 10:12 AM
------------
Yes, and they should be prosecuted for mortgage fraud.

Anonymous said...

This is the most individually-damning statistic of all--They have proven that over 70% of the people in foreclosure status LIED ON THEIR APPLICATION--

Yeah, Sheila Bair--Freeze them at the Teaser rate, while millions of financially responsible, ethical citizens pay higher rates on their mortgages...makes total sense.

borkafatty said...

Thinking the other night of starting an Ebay type website based on Short sales of homes..where one bids the price and the short wins

ShortSale.com

I don't know just a drinking Night thought.

Any takers

Realist® said...

That would be like walking into a casino, gambling all your money away, then expecting the house to reimburse you.

How charming.

Anonymous said...

because they tricked me into putting false information down that I knew was false.....

Anonymous said...

To paraphrase an old saying:

"If you lied on your mortgage application, that's your problem. If everyone lied on their mortgage applications, that's the government's problem".

wc said...

It's too hard to distinguish between the liars and gamblers and the simply uneducated victims of predatory lending. We are all going to have to pay in one way or another for the greedy people that knowingly made money off of all of this and helped drive the prices so high to begin with. If only there was a tax for stupidity and greed - we would have plenty of money for universal healthcare

michael said...

because everyone else is doing it.

Andrew from Russia said...

And in (post-)Soviet Russia the Bank Deceives the Borrower!

Indeed, only recently, four years into mass-lending, were our banks ordered to disclose "effective interest rates". That was subprime the other way round - many rednecks locked into paying heaps of interest for their $100 stereos.

Veronica Lodge said...

RE: Interest rate freezes

Freeze the rates, but for how long?

The liars-loan people who are currently in trouble with their negative amortization and interest only loans will find only temporary relief from their mortgage problems.

The mortgage principle will still be unpaid. Negative amortization loans will keep getting bigger and interest only loan balances will not get any smaller.

The value of leveraged homes will continue to decline and the mortgages will remain unpaid. In the meantime, raging inflation will continue to eat away at the economic stability of troubled home debtors.

The situation still appears to be hopeless.

V.L.

Anonymous said...

The IRS should look into all the stated income loans to recover back taxes from all the lying scum who cheated on their taxes.

Anonymous said...

That would be like walking into a casino, gambling all your money away, then expecting the house to reimburse you.

How charming.


You rob a bank before heading to the casino, the expect the house to reimburse you for the money you stole.

Very charming indeed. Got guillotine??

Anonymous said...

In the world of the DemoRats, people who commit mortgage fraud are victims - especially if they are non-white.

Anonymous said...

"Wonder if Chris Dodd, Hillary Clinton, Chuck Schumer and the rest of the idiots calling for interest rate freezes and housing gambler bailouts ever stopped to consider such a thing."

1. yes, because they said you can only be bailed out if you can afford your mortage but you got or were duped into a mortgage you coudn't afford. if you lied on your income, you did it because you couldn't afford the home anyway.

2. not everyone who bought a home was a gambler or speculator.

3. $1 Billion is not much of a bailout. it's barely a band aid.

Prophet of Panic said...

Because this is America!

Anonymous said...

Because it is in the lender's best interest. Period. Listen, ultimatly the lender is the one that will be left holding the bag. It is the lender's fault that these loans ever were extended to people that could not afford it. What did they think was going to happen if you tell people "What is your monthly income - wink wink, oh no, we won't verify it" I actually remember at some mortgage offices they would tell borrowers NOT to include income docs or tax statements because if the underwriters saw them they would have to make it a full doc loan (honest loan). I think modifications are a great idea, that way the risk falls on the shoulders of the ones who extended the loans in the first place and is not passed on to the neighbors (as a foreclosure) or to the tax payors (through FHA or governement assistance). Besides, it is in the lender's best interest since they otherwise will lose more principal through forclosure cost and then sales cost. At least if they freeze the loan at a low teaser, they will still have an income stream coming in and have the chance to recoup that principal at some point in the future. It also will improve the market as you will not have a flood of foreclosures making it worse. But I am sure that the folks on this blog don't want to hear that, it is better for everyone to watch their home values fall as well, just so you can buy cheap right? That is the bubble blog mantra right? Death to housing?

Anonymous said...

"Liars deserve to lose their homes"

-----------------------------------
That's right anonymous, because everyone that took out a loan in the last 3 years was a liar. And for the real hardliners on this blog, the last 5 years or more have ALL been liars. I see how it works, if you are on the bubble blog you have some god given right to keep your dwelling (apartment, flat etc.) but families that just wanted a home for their 3 kids vs. living in a cramped apartment deserve to live on the street because they believed a con man? Oh what is that? Only the liars should lose their homes? Well, how do you suppose you are going to weed out the honest from the liars? That family MUST not have lied because they are a family, but that Real Estate investor is the bad guy, even though he gave all of his info to a mortgage broker and was completely honest and still got put in a bad loan. I wonder how many on here are sitting in loans they could not have qualified for, and just got lucky enough (or smart enough) to not get in to a suicide loan? People in glass houses should not throw stones, and frankly I am seeing a lot of glass houses on these threads and a hell of a lot of "Holier than thou" talk from a bunch of people that are either heartless, or just plain stupid and hypcritical.

Martin said...

I don't know if there is a criminal penalty for giving false information on a mortgage application. But I know that such applications usually have a section that says if any of the information provided is false, the lending agency gets to call the loan immediately. which makes it a civil/ equity law matter at least.

So the lenders should just call in all the liar loans, and just foreclose on the ones that aren't paid up in full... Oh wait.... Doh!

Anonymous said...

you can only be bailed out if you can afford your mortage but you got or were duped into a mortgage you coudn't afford.

How do they know who was duped and who wanted the low teaser rates because they planned to sell in two years?

cry me a river said...

* sniff * sniff * lets all hold hands Anon and sing a song for those poor families. Would you like a tissue?

Anonymous said...

To Realist,

The correct casino analogy is:
-you walked into the casino with $5000
-took out markers for $250,000
-went up to $300,000 betting black /red at the roulette wheel
-the pit boss gave you comps at the restaurants, club, high roller suite, etc. (same as HELOC, vacation, Humvee, etc.)
- you played a little too long and no you have $125,000 in chips

Is the casino just going to let you walk out?

I'm in the industry and over the last 5 years and in 50% of the homes I appraised the "borrower" would not have qualified for an apartment credit check never mind a $400k - $800k stucco box. The lending decision was not up to me, just the valuation of the collateral. Well, on the "day of inspection" the collateral I valued was worth $x amount. I guess they should have looked into their borrowers credit, job history, etc. Oops, they did and the skell mortgage broker made the numbers work for his skell wholesale rep. Guess what? It was also aided by the skell appraiser that valued the collateral after they kicked me off the panel for "killing" too many deals. Who's laughing now? F U New Century, First Franklin, etc.. I'll be having boat drinks for the next 5 years while your former "producers" are asking my kids what toy they want with their happy meal!

Socalappraiser

FlyingMonkeyWarrior said...

Chris Dodd, Hillary Clinton, Chuck Schumer and the rest of the idiots calling for interest rate freezes and housing gambler bailouts ever stopped to consider such a thing.

"If you lied on your loan application why is the lender supposed to bail you out with a loan modification?"
+++++++++++++++++++++++++++++++++++
My take Keith.
The lenders will not bail out the FB, the politicians are lying so you will vote for them.

Tangelo Mozilo said...

Anonypussy 11:48 whined . . .

"Because it is in the lender's best interest. Period. Listen, ultimatly the lender is the one that will be left holding the bag."
-------------------------

If it's in the lenders' best interest, why don't they do it themselves? Why do we need a law to force lenders to act in their own best interest?

Unless the great and wise Hillary Rotten with her Chairman Mao pant suits knows what's good for the lenders better than the lenders do.

Tangelo Mozilo said...

anonypussy 11:59 whined . . .

"I see how it works, if you are on the bubble blog you have some god given right to keep your dwelling (apartment, flat etc.) but families that just wanted a home for their 3 kids vs. living in a cramped apartment deserve to live on the street because they believed a con man?"

--------------------------

First, get a name.

Second, I do have a right to keep my dwelling because . . . I ACTUALLY MAKE MY PAYMENTS. People who do not make their rental or mortgage payments do not have a right to keep their dwellings. I know it's a big mean world, but here in the United States, we treat adults like big boys and girls, and expect them to pay obligations that they promise to pay and for which they recieve valuable consideration (i.e. a place to live).

At least we don't have debtors' prisons in this day and age. What we do to people who default on their obligations is really pretty mild. We take away the thing they have but are not paying for, and we (sometimes) make them pay the difference between the value of the repossessed item and what they owe to the lender. Pretty reasonable.

Third, Boo Hoo. Waaaa.

Fourth, people who lose their houses to foreclosure will have to *gasp* RENT! Oh, horrors! They won't be living on the street, so don't be so dramatic.

Fifth, why should I be forced to subsidize others' financial excesses when I have exercised fiancial restraint by putting off the gratification of buying a house of my own? This will only make it more difficult for me to buy a house in the future by taking on a responsible amount of debt.

Sixth, I don't think the government should force the market to distinguish between people who have defaulted on their mortgages because they are liars, because they are financially illiterate, or because they fell on hard times. Tough cookies for all of them.

Seventh, whenever you say that someone has a right to something, that means that everyone else doesn't have a right to something. When you say that someone has the right to be free from discrimination, that means that others don't have the right to discriminate. When you say that someone has the right to stay in their house even if they can't pay for it, that means that others don't have the right to keep their own money or to live in a free market.

Seventh, your post has been pwned. Go back to working on the Hillary campaign.

Peter T said...

Liars should not be forgiven the part of the mortgage that could not be covered by selling the house, even if the mortgage was originally non-recouse.