Comments on: The Sub-prime Mortgage Market — CNN Open House w/ Gerri Willis http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/ DoublePositive | LIVE Hot Transfers Leads Wed, 08 Feb 2012 19:34:53 +0000 hourly 1 http://wordpress.org/?v=3.0.4 By: finance advice http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-28 finance advice Fri, 12 Feb 2010 08:45:17 +0000 http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-28 One of the key reasons for housing crisis is banks giving huge mortgages for big houses consumers cannot honestly afford and then the interest rates went up and the housing values went down then it put those consumers in a lot of trouble. What didn’t help was some people at Wall Street taking those mortgages and investing them somewhere else to investors so when more people went bankrupt and foreclosed it brought more people into this mess. One of the key reasons for housing crisis is banks giving huge mortgages for big houses consumers cannot honestly afford and then the interest rates went up and the housing values went down then it put those consumers in a lot of trouble. What didn’t help was some people at Wall Street taking those mortgages and investing them somewhere else to investors so when more people went bankrupt and foreclosed it brought more people into this mess.

]]> By: finance advice http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-27 finance advice Thu, 11 Feb 2010 14:07:16 +0000 http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-27 If we could look back and know that the housing crisis would cause a worldwide economic recession then lots more would have been done to prevent it and cause little damage globally. There were people of Wall Street that got greedy and wanted to make a lot of money from bad choices and this is how it ended up. If we could look back and know that the housing crisis would cause a worldwide economic recession then lots more would have been done to prevent it and cause little damage globally. There were people of Wall Street that got greedy and wanted to make a lot of money from bad choices and this is how it ended up.

]]> By: Leah http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-26 Leah Thu, 19 Nov 2009 05:12:24 +0000 http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-26 How do you like using wordpress so far? I'm thinking about putting up a new blog install and still debating between wordpress and joomla How do you like using wordpress so far? I’m thinking about putting up a new blog install and still debating between wordpress and joomla

]]> By: Doug http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-25 Doug Sat, 21 Feb 2009 14:32:43 +0000 http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-25 I was wondering if the government was going to help pay for my new car loan, like they are with the mortgages, since my car is now worth less than when I bought it a few months ago? Lorton, Va I was wondering if the government was going to help pay for my new car loan, like they are with the mortgages, since my car is now worth less than when I bought it a few months ago?

Lorton, Va

]]> By: LaRhonda Ferguson http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-24 LaRhonda Ferguson Wed, 12 Nov 2008 20:27:07 +0000 http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-24 I am a single mother and just looking back on the story about joe the plumber, there are also more people out there that are about to lose their homes. I am one of the majority of people who was working at a job for four years, when a co-worker decides that she wants to cause problems for me. I was terminated in May of 2008 and falsely accused of throwing paper on a desk and was denied unemployment. Since I have been out of work for six months, my house is in foreclosure and also my car is in repossession. I am a single mother and just looking back on the story about joe the plumber, there are also more people out there that are about to lose their homes. I am one of the majority of people who was working at a job for four years, when a co-worker decides that she wants to cause problems for me. I was terminated in May of 2008 and falsely accused of throwing paper on a desk and was denied unemployment. Since I have been out of work for six months, my house is in foreclosure and also my car is in repossession.

]]> By: craig http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-23 craig Fri, 29 Feb 2008 20:25:16 +0000 http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-23 Here, in a nutshell is what caused the mortgage meltdown and how we can stop the downward spiral. When the Federal Funds rate went down to 1% after 9/11, mortgate rates were so low that it allowed many buyers, who otherwise couldnt afford to buy a home to now buy one. There always existed subprime loans in one form or another, but after 9/11 subprime loan products were derived that allowed Borrowers to use Stated Income loans rather than Fully Documented loans with no money down and 100% financing. The problem is that 100% Stated income loans were supposed to be for Buyers acquring the home as a primary residence. However, investors would apply for numerous 100% stated income loans at a time with no money down before they showed up on their credit reports in order to 'flip' the homes to someone else for a profit. These investors had no intention of using the home as their primary residences. The buying frenzy exploded as legitmate home buyers some who lied on their credit applications that their stated income was higher then it was and those who didnt lie were now competing with the investors who all were lying. As prices escalated, the federal Reserve began to raise interest rates which caused the housing market to peak in the summer of 2004 which caused the real estate market to get shaky and then when all sub-prime lenders pulled back from stated income loans in early 2007 the elimination of the 100% financing and no money down loans has caused a triple whammy. 1) Legitimate buyers who could make payments now couldnt make payments because interest increases caused their payment to rise. 2) Investors who lied couldn't make payments because payments rose above what rents they could collect on the homes they bought. 3) First time home buyers couldnt qualify for loans, cuz they now needed a down payment and the interest rates were now to high for them to qualify. Kudlow and Company recently stated in one of their programs that 70% of all sub prime mortgages were misrepresented by either investors who said they were going to live in the homes and they didn't intend to live in it; and by both , buyers who did intened to live in the home and investors who over stated their income to an amount sufficient to allow them to buy the home. Not only did buyers lie, but lenders were making so much money they never audited the loans that came in or never trained their mortgage underwriters or officers to make sure that people were not lying on their applications. In some cases, borrowers deliberately lied in other cases mortgage brokers lied and misled the borrower so they could make a commission. You can now see the result. The demand for homes has slowed to a trickle causing homes to go to foreclosure and people wanting to sell their homes now having to compete with repos and short sales. When will it stop ? Nobody knows ! Prior to 9/11, FHA loans were basically the subprime loans used by buyers with little down payment and low credit standards with the only exception that FHA would verify and document income. However, after 9/11 borrowers moved to the creative loan products by conventional lenders because conventional lenders did loans on stated income not verified income. Now that we have the mortgage mess, foreclosures will stay on a credit report for 7 years for conventional loans and only 3 years for FHA. There are many people who could get an FHA loan right now with little money down and make payments, but cant for three years under FHA guidelines. The way to create demand for more homebuyers and to keep prices from spiraling downward would be some form of amnesty to buyers who have good credit with the exception of the foreclosure. This would get demand back into the housing market to help support the prices. Here, in a nutshell is what caused the mortgage meltdown and how we can stop the downward spiral.

When the Federal Funds rate went down to 1% after 9/11, mortgate rates were so low that it allowed many buyers, who otherwise couldnt afford to buy a home to now buy one. There always existed subprime loans in one form or another, but after 9/11 subprime loan products were derived that allowed Borrowers to use Stated Income loans rather than Fully Documented loans with no money down and 100% financing.

The problem is that 100% Stated income loans were supposed to be for Buyers acquring the home as a primary residence. However, investors would apply for numerous 100% stated income loans at a time with no money down before they showed up on their credit reports in order to ‘flip’ the homes to someone else for a profit. These investors had no intention of using the home as their primary residences.

The buying frenzy exploded as legitmate home buyers some who lied on their credit applications that their stated income was higher then it was and those who didnt lie were now competing with the investors who all were lying. As prices escalated, the federal Reserve began to raise interest rates which caused the housing market to peak in the summer of 2004 which caused the real estate market to get shaky and then when all sub-prime lenders pulled back from stated income loans in early 2007 the elimination of the 100% financing and no money down loans has caused a triple whammy.

1) Legitimate buyers who could make payments now couldnt make payments because interest increases caused their payment to rise.
2) Investors who lied couldn’t make payments because payments rose above what rents they could collect on the homes they bought. 3) First time home buyers couldnt qualify for loans, cuz they now needed a down payment and the interest rates were now to high for them to qualify.

Kudlow and Company recently stated in one of their programs that 70% of all sub prime mortgages were misrepresented by either investors who said they were going to live in the homes and they didn’t intend to live in it; and by both , buyers who did intened to live in the home and investors who over stated their income to an amount sufficient to allow them to buy the home. Not only did buyers lie, but lenders were making so much money they never audited the loans that came in or never trained their mortgage underwriters or officers to make sure that people were not lying on their applications. In some cases, borrowers deliberately lied in other cases mortgage brokers lied and misled the borrower so they could make a commission.

You can now see the result. The demand for homes has slowed to a trickle causing homes to go to foreclosure and people wanting to sell their homes now having to compete with repos and short sales. When will it stop ? Nobody knows !

Prior to 9/11, FHA loans were basically the subprime loans used by buyers with little down payment and low credit standards with the only exception that FHA would verify and document income. However, after 9/11 borrowers moved to the creative loan products by conventional lenders because conventional lenders did loans on stated income not verified income.

Now that we have the mortgage mess, foreclosures will stay on a credit report for 7 years for conventional loans and only 3 years for FHA. There are many people who could get an FHA loan right now with little money down and make payments, but cant for three years under FHA guidelines. The way to create demand for more homebuyers and to keep prices from spiraling downward would be some form of amnesty to buyers who have good credit with the exception of the foreclosure. This would get demand back into the housing market to help support the prices.

]]> By: Sandy Karol http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-22 Sandy Karol Tue, 15 Jan 2008 23:30:18 +0000 http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-22 Gerri, after watching your segment today, Jan 15, 2008, on foreclosures in some Michigan communities, I believe you should not insinuate that the eight foreclosures on the street you were standing on were all due to adjustable rate mortgages and/or predatory lending practices. It certainly is a fact that many people have opted for some form of adjustable rate mortgage(s) to keep their initial payments low, but this does not necessarily result in the reason for the foreclosures. Unplanned changes in the consumer's life may have reduced their income and/or inflated their expenses. Consumers need to take responsibility for their actions - perhaps considering the worst case scenario - if the unexpected was to befall them - to prepare for the uncertain future. Also, just because a consumer "qualifies" for a mortgage, does not indicate that they will be able to make the payments on time for the term of the loan whether it is a fixed or ARM. Only the borrower knows their own personal spending habits that are not always spelled out in their financials or on the credit report when approving them for a loan. Also, many foreclosures could be the result of medical bills for unexpected illness or unplanned employment changes. Gerri, as you are slamming the mortgage industry, I don't see you stating why House A is in foreclosure and why House B next door is in foreclosure or House C, D, E, F, G & H. These may not be because of the adjustable mortgages. Gerri, after watching your segment today, Jan 15, 2008, on foreclosures in some Michigan communities, I believe you should not insinuate that the eight foreclosures on the street you were standing on were all due to adjustable rate mortgages and/or predatory lending practices. It certainly is a fact that many people have opted for some form of adjustable rate mortgage(s) to keep their initial payments low, but this does not necessarily result in the reason for the foreclosures. Unplanned changes in the consumer’s life may have reduced their income and/or inflated their expenses. Consumers need to take responsibility for their actions – perhaps considering the worst case scenario – if the unexpected was to befall them – to prepare for the uncertain future.
Also, just because a consumer “qualifies” for a mortgage, does not indicate that they will be able to make the payments on time for the term of the loan whether it is a fixed or ARM. Only the borrower knows their own personal spending habits that are not always spelled out in their financials or on the credit report when approving them for a loan. Also, many foreclosures could be the result of medical bills for unexpected illness or unplanned employment changes. Gerri, as you are slamming the mortgage industry, I don’t see you stating why House A is in foreclosure and why House B next door is in foreclosure or House C, D, E, F, G & H. These may not be because of the adjustable mortgages.

]]> By: chris http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-21 chris Thu, 06 Dec 2007 22:27:59 +0000 http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-21 After watching CNN today I was motivated to write a letter and here is what I wrote. This morning you mentioned that in order to refinance a home you need to have a minimum credit score of 650. Here is the quote from your transcripts of the show. Aired December 6, 2007 - 10:00 ET “WILLIS: Well, refinancing is a whole different ball game than it was say two years ago. These days if you want to refi, you'll have to have a decent credit score of 650 or higher. You'll need to document your income and your assets. And you'll need at least 10 percent of equity in order to refinance.” Then later today I heard the live report online at CNN.COM that stated a minimum credit score of 660 was the requirement. I work for a mortgage company and I have a refinance loan product available today that requires a minimum credit score of only 540. I also have programs that don’t require a credit score at all. The misinformation that is being presented is very harmful and I expect that many people will believe that they won’t qualify for a refinance after watching your show when in actuality they might. Could you please do some research into this matter and get back to me with when you may air a retraction of the misleading comments made about these requirements? I hope to here better reporting soon. After watching CNN today I was motivated to write a letter and here is what I wrote.

This morning you mentioned that in order to refinance a home you need to have a minimum credit score of 650. Here is the quote from your transcripts of the show.
Aired December 6, 2007 – 10:00 ET
“WILLIS: Well, refinancing is a whole different ball game than it was say two years ago. These days if you want to refi, you’ll have to have a decent credit score of 650 or higher. You’ll need to document your income and your assets. And you’ll need at least 10 percent of equity in order to refinance.”
Then later today I heard the live report online at CNN.COM that stated a minimum credit score of 660 was the requirement. I work for a mortgage company and I have a refinance loan product available today that requires a minimum credit score of only 540. I also have programs that don’t require a credit score at all. The misinformation that is being presented is very harmful and I expect that many people will believe that they won’t qualify for a refinance after watching your show when in actuality they might. Could you please do some research into this matter and get back to me with when you may air a retraction of the misleading comments made about these requirements?

I hope to here better reporting soon.

]]> By: al http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-20 al Sun, 23 Sep 2007 18:04:33 +0000 http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-20 like they say bad things happen to good people. you live pay check to pay check and now we are an arm, it will adjust in 2009. the cost of living is not keeping up with the world today, everything has skyrocketed and they expect the people to live like that? while the rich get richer and the poorer get poorer. people are so scared they are going to loose their house, we are one of those people. then people wonder why their kids think what is there to love for? we do not have a chance in the world to buy a house....we need to have the federal government step in and help everyone to keep this economy going and save our houses....thank you very much!!!!!!!!!!! like they say bad things happen to good people. you live pay check to pay check and now we are an arm, it will adjust in 2009. the cost of living is not keeping up with the world today, everything has skyrocketed and they expect the people to live like that? while the rich get richer and the poorer get poorer. people are so scared they are going to loose their house, we are one of those people. then people wonder why their kids think what is there to love for? we do not have a chance in the world to buy a house….we need to have the federal government step in and help everyone to keep this economy going and save our houses….thank you very much!!!!!!!!!!!

]]> By: Clare http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-19 Clare Sat, 25 Aug 2007 14:05:17 +0000 http://blogs.doublepositive.com/2007/03/25/the-sub-prime-mortgage-market-cnn-open-house-w-gerri-willis/#comment-19 I would like information on your show on Saturday, August 25th at approximately 9:00am-9:30am. I caught the end of it. If you have information for potential home buyers regarding mortgages, what to watch out for etc. How the house market affects new buyers - postitive/negative I would really appreciate it. Thank you very much! Clare I would like information on your show on Saturday, August 25th at approximately 9:00am-9:30am. I caught the end of it.

If you have information for potential home buyers regarding mortgages, what to watch out for etc. How the house market affects new buyers – postitive/negative I would really appreciate it.
Thank you very much!
Clare

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