The REAL story here that Spencer doesn’t
tell you about is the REAL
injustice where Colorado real estate is
concerned. And that’s the foreclosures
YOU as the U.S. taxpayer foot the bill
for.

Never mentioned is the vast number of
Federally insured residential home loans
defaulted on by borrowers who in past
years never would have qualified for a
mortgage.

The taxpayer scam which
continues even to this day regardless of
real estate values or economic conditions
is
the virtual racket associated with
Federally insured home loans by FHA and
VA. And WE the American people pay when
they default. NOTHING IS BEING SAID!
It’s the dirty little secret the
beneficiaries don’t want you the taxpayer
to know about.

You see, about 10 or 15 years ago our
elected leaders in Washington decided
EVERYBODY regardless of their financial
ability should own a home. ESPECIALLY
minorities. I would like to hear about
how many BILLIONS of taxpayer dollars
have been used to float the housing
operation called the Federal Housing
Authority and it’s giveaway home loans
programs which are nothing more than
subsidized housing for the poor.

I’d like to know of the thousands of
foreclosures in the state how many of
these loans are insured by YOU the
taxpayer and have NOTHING TO DO WITH
THE SUBPRIME INDUSTRY. The convenient
boogy man for advocates for the “common
good” meaning screw the taxpayer we want
to push our social agendas, one of which
is free housing for the poor called
FHA.

The market is correcting, that is why “GREW” is better than “GROWS”. The pains of which are being felt now throughout the world markets now and will be for some time, but you should have written this 3 years ago when it would have mattered. Not as an after the fact assessment of some powerful insight of people’s spending habits and the desire of commerce to capitalize.

That’s the current state of FHA home loan
financing. In essense a “CASH OUT” home
purchase for unqualified borrowers.

Some of THESE loans go into default without
a single payment being made. Gee I wonder
why? This is called CRAZY underwriting.

Then: to top it off when these borrowers
get three months behind the lender and
realtor can approach them with the FHA
“PRE FORECLOSURE” program which allows
the soon to be foreclosed seller a $500
INCENTIVE to sell pre foreclosure and NOT
have the foreclosure appear on their credit,
(so they can qualify in only three years
to get another FHA loan) and the loan
can be “Paid off” for 82% of the current
appraised value, with the TAXPAYER picking
up the deficiency. Many home are worth less
now than the loan balance from a year ago.
That deficiency could be 25 30 or 40%
or at worst $80,000 on a $200,000 mortgage.
All paid for by the TAXPAYER through HUD.

All the lenders and Realtors have to do is
find a steady stream of human beings with
pulses and they can “CHURN” the local
inventory of foreclosure properties
adinfinitum. Making their commission each
time all on the tax payers dime.

And your talking about RISK in the private
sector SUB PRIME market???? Those people
HAVE to make a profit or their out of
business. The Federal government is in the
BUSINESS of waisting the taxpayers dollars
with their GIVEAWAY PROGRAMS. And you
talk about RISK. GIVE ME A BREAK!

At least in the FHA and VA loan market borrowers were required to show income and asset documentation. Once again, an idea that I may agree wtih you on you prove to me your idiocy and extrapolate your thoughts into a rambling mess of the private sector against every body else. Get a grip, man. Seriously.

Also included in these numbers that Jim talks about are Pay Day Loans…a legal loan sharking service. My original thougths did not include thes numbers that are rising..only because one would think that they should no affect foreclosure rates…..same with credit cards and car loans……….any resonable person would make their home loan payment first, but Jim blames lenders for unreasonable people and their (lack of) decision making…

My point was Jim’s numbers were an increase of 2005 and 2006…..any body living on this planet knows that these numbers will decline with respect to mortgages in 2007. Pay Day numbers, car loans, credit cards etc will decline as soon as they start to lose money..

And yes, Jim, I am well aware of how loose mortgage lending practices affect the rest of society…..but your column is based on a simpleton mentality, no matter how correct in it’s premise it may be.

noidea, I didn’t see the “study” which
included creditors other than Sub Prime
mortgage companies, but the common
complaint and being this is the political season
there always a hidden political agenda,
Hedge funds whatever. If that paper is
now worthless private investors have suffered.
Private investors.
Believe me (whether
you care to or not) I know of what I speak.
I don’t think consumer credit issues are
the problem here. And it’s a fact that
the press does not care to discuss the racket
going on with government insured loans at taxpayers expense
and the multitude of programs (documented but
so what? with lax qualifying criteria and desktop
”underwriting” approval, big deal!) They are loans
which should never happen but do time and again.
These things which assist
unqualified borrowers to buy homes as a
directive of Washington ideology, social science
and housing for “underprivileged” minorities. It’s a
fact. Not all sub Prime lending is
“stated” and generally loan to values
provide for a cushion in the case of
default. They don’t lend 100% of value. It’s high risk lending, it
addresses a probability of default. The wrongful assumption
was that real estate values would continue to appreciate.
Same deal with interest only products- they don’t lend 100%.
And generally speaking people with equity and decent credit
don’t go into foreclosure– they sell. They sell to
get what they can if anything of their equity and preserve
their credit rating. Not so with FHA borrowers they LITERALLY
have NOTHING to lose by foreclosure. And some have even
gained, on the taxpayers dime. It’s time the public understands
they are heavily subsidizing this housing debacle.

There is a tremendous amount of misinformation on the housing market, much of it because the mainstream media have so few decent reporters who know anything that they all play the same story, blathering about the poor working class people who are losing their homes. Seldom do we get to read how the mortgage broker assured them the deal was “good” or the appraiser came back with a ridiculously high valuation just to make the loan qualify. Most of the defaults around the country are by people who planned to flip the property and make money on the increase in value. Surprise, the original value was unrealistic and the increase didn’t manifest itself. When the mortgage reset at a higher rate that the borrower never planned to have to pay, boom, into the dumper goes that mortgage.

Hammond and Noidea, there is enough blame in this fiasco for everyone to get his or her share. What we don’t need is more blather (Hammond) against FHA and VA programs, which for more than 50 years have helped put more working-class Americans into homes of their own. Try thinking before typing, and open the mind, you never know what might fly in or out.

The credit breakdown with respect to mortgages is a MAJOR issue. The House moved to correct some of the problems yesterday but went into areas that the free market economy on it’s own is correcting. “Do goodism” on the part of the majority of Democrats who sponsored and voted for the bill are going to deepen the problem…..Specifically with respect to homeowners trying to refinance not being able to use their equity for closing costs on refinances. Although this sounds noble on paper, the poor will not be able to do so and this will deepen their problems in getting out of their subprime loans or to refinance in general. The wage earner will not be able to save up the money to do so and will basically be SOL. I personally need to refinance an ARM and I do not relish paying money out of my pocket to do so rather than using my own equity.

Rather than stopping the hemorrage of foreclosures it is, if the bill passes the Senate, going to deepen even more. The stricter licensing etc. are all good parts of the bill but the Democratic supported bill reaches it’s mis-guided hand into an arena that the markets will correct on it’s own. Nannyism as Harsanyi would put it.

If the House is concerned about equity predators, they perhaps should revise the HOEPA ACT limiting the percentage of fees charged on a loan and perhaps have some sort of protection against multiple refinances within a time frame from a single originating source. This, in my opinion, would help remove some of the predators that have created this debacle.

That being said, there are some excellent aspects of the bill with controlling the “type” of person, and qualifications, that are able to originate mortgage loans and this is long over due.. There are also more disclosure provisions etc. So overall, a lot of good was done. But if we go overboard, watch out. This will be just the beginning as borrowers will not be able to unwind the mess that they have gotten themselves into.

And yes, you are correct.>>> Subprime loans ARE risky. Regardless of what Dennis says. Or let me clarify, Subprime AND 100% financing in the same sentence are risky…Subprime has it’s place in a free market economy, but disclosure is the key.