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Subprime mess, blame, winners, losers?

Discussion in 'Free Speech Alley' started by houtiger, Aug 11, 2007.

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TigerWins Founding Member

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29,526 + 120% = 64,957.

Income has more to do with how much you can borrow. Higher income people with poor credit are going to get a higher APR just like lower income people with poor credit. The difference is the higher income people can borrow more money.

TigerWins, Sep 5, 2007

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marcmc99 Founding Member

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TigerWins said: ↑

29,526 + 120% = 64,957.
Click to expand...

I guess I'm still reading it different; as in 120% of the median income or greater, not 120% higher than the average median income. Maybe they just worded it poorly.

Upper-income is defined as borrowers with incomes 120% or greater than the area median income for the metropolitan area
of the borrower. Low-income borrowers have incomes below 50% of the median income, moderate-income borrowers have
incomes between 50% and 79% of median income, and middle-income borrowers have incomes 80-119% of median income.
Click to expand...

marcmc99, Sep 5, 2007

#32
TigerWins Founding Member

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Yeah, I'm not sure about that. I just assumed someone wouldn't suggest 35K is upper income, but ACORN is a very liberal group trying to make a point, so it's possible.

These reports are meaningless without knowing the borrowers' credit history.

TigerWins, Sep 5, 2007

#33
LSU0596 Respect

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red55 said: ↑

It's everywhere, I'm afraid. One of my colleagues in BR is worried badly that he will lose his house. He did everything wrong from buying an overpriced house, to taking a series of variable-rate mortgages on it, all of which counted on refinancing at a better rate in a few years. It just didn't work out that way and his mortgage payment keeps growing. He's perpetually paying on the last day of his grace period, working a second job and borrowing money again. Just a matter of time before stress kills him or he goes bankrupt.
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Sorry about your friend. Remember, Rule #1, if rates are at historic lows as they have been for the past 5 years, always go for a fixed rate. Only use variable rates when rates are high and expected to go down by more that 1 to 2%. This should have been explained to him, but probably wasnt and its unfortunate because alot of people made this mistake.

LSU0596, Sep 5, 2007

#34
saltyone So Mote It Be

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TigerWins said: ↑

Yeah, I'm not sure about that. I just assumed someone wouldn't suggest 35K is upper income, but ACORN is a very liberal group trying to make a point, so it's possible.

These reports are meaningless without knowing the borrowers' credit history.
Click to expand...

ACORN is one of the sorriest organizations on the planet. They've done more to hurt consumers than they ever will to help them. I'm going to stop typing about them now, or else I'm libel to say something very unChristian like.

saltyone, Sep 5, 2007

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DRC TigerNator

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Don't look now folks but a new FHA loan program was just announced that is supposed to help 250,000 people with ARM loans avoid foreclosure.

http://www.fha.gov/

DRC, Sep 6, 2007

#36
houtiger Founding Member

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drc40 said: ↑

Don't look now folks but a new FHA loan program was just announced that is supposed to help 250,000 people with ARM loans avoid foreclosure.

http://www.fha.gov/
Click to expand...

I feel my tax dollars going to subsidize sleaze ball mortage lenders who got rich taking bad business models "public", cashed out, left mom and pop holding the stock which became worthless, and people who couldn't tell what was going to happen to their payments in a few years. Yuk!

houtiger, Sep 7, 2007

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marcmc99 Founding Member

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I was going through the county land records online researching some stuff, and I found a foreclosure in the subdivision where I recently purchased a lot, so I checked out the orignal deed of trust. The initial interest rate was 7.775%, and this was in June 2006. The Prepayment Rider on this thing is crazy. Just thought I'd post it, because I'd never actually seen one of these and thought it was interesting.

PREPAYMENT RIDER
ADJUSTABLE RATE LOAN

This prepayment Rider is made this 23rd day of June 2006 , and is incorporated into and shall be deemed to amend and supplement the Promissory Note (the “Note”) and Mortgage, Deed of Trust or Security Deed (the “Security Instrument”) of the same date given by the undersigned (the “Borrower) to secure repayment of Borrower’s Note to
New Century Mortgage Corporation (the “Lender).
To the extent that the provisions of this Prepayment Rider are inconsistent with the provisions of the Note and/or Security Instrument, the provisions of this Rider shall prevail over and shall supersede any such inconsistent provisions of the Note and/or Security Jnstniment.
In addition to the covenants and agreements made in the Note and Security Instrument, the Borrower and Lender further covenant and agree as follows:
5. BORROWER’S RIGHT TO PREPAY
I have the right to make payments of principal at any time before they are due. A prepayment of all of the unpaid principal is known as a “full prepayment”, A prepayment of only part of the unpaid principal is known as a “partial prepayment”.
Except as provided below, I may make a full prepayment or a partial prepayment without paying any penalty. If I make a partial prepayment equal to one or more of my monthly payments, my due date may be advanced no more than one month. If I make any other partial prepayment, I must still make each later payment as it becomes due and in the same amount. I may make a full prepayment at any time. However, if within 2 year(s) after the execution of the Mortgage I make a full prepayment or a partial prepayment, I will pay a prepayment charge in an amount equal to the applicable percentage, as described in the following paragraph, for the year in which I make the full prepayment or partial prepayment.
If within the first year after the execution of the Mortgage I make a full prepayment or a partial prepayment, I will pay a prepayment charge in an amount equal to five percent (5%) of the unpaid principal balance. If within the second year after the execution of the Mortgage I make a full prepayment or a partial prepayment, I will pay a prepayment charge in an amount equal to four percent (4%) of the unpaid principal balance. If within the third year after execution of the Mortgage I make a full prepayment or a partial prepayment, I will pay a prepayment charge in an amount equal to three percent (3%) of the unpaid principal balance. If within the fourth year after the execution of the Mortgage I make a full prepayment or a partial prepayment, I will pay a prepayment charge in an amount equal to two percent (2%) of the unpaid principal balance. If within the fifth year after the execution of the Mortgage I make a full prepayment or partial prepayment, I will pay a prepayment charge in an amount equal to one percent (1%) of the unpaid principal balance,BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Prepayment Rider.
Click to expand...

marcmc99, Sep 7, 2007

#38
saltyone So Mote It Be

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Five year prepay penalty on an adjustable rate note. :dis: It's freaking ridiculous that someone would sign that thing.

saltyone, Sep 10, 2007

#39
houtiger Founding Member

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SAN FRANCISCO (Reuters) - Mortgage lenders launched more than 70,000 foreclosure proceedings in California in the third quarter, marking a record for the state, where many housing markets are slumping amid mortgage market turmoil, according to a report released on Friday.

Mortgage lenders filed 72,571 notices of default against delinquent borrowers from July through September, up 34.5 percent from the prior quarter and 166.6 percent from a year earlier, according to the report by DataQuick Information Systems, a La Jolla, California-based real estate information service.

<snip>

Half of California's mortgage defaults are concentrated in 293 zip codes, almost all in the Inland Empire of Southern California, made up of Riverside and San Bernardino counties, and in the state's Central Valley, where falling home prices are making refinancing distressed mortgages difficult.

The median home price last quarter for the 293 zip codes was $352,250, down 11.7 percent from a peak of $399,000 in the year-earlier quarter.
Click to expand...

http://www.reuters.com/article/busi...Type=RSS&feedName=businessNews&rpc=23&sp=true

Man, that's a $47,000 loss if you bought at the top! Things still getting worse in Cal. with new records being set for number of foreclosures. Its not all over the state, seems to be concentrated in certain areas.

houtiger, Oct 27, 2007

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