Dow plunges

Agree, FL is somewhat protected from a complete bust like the market in the late 80's early 90's (Cali). Cali market completley collapsed and people went from being worth tens of millions to broke, paper rich but cash poor. FL at least has an influx of people moving, even though now theirs a chunk moving out of state to areas like N.C. etc. I was reading some articles where the majority of people in Cali are in neg am loans, if anything, most of the experts agree that its a strong chance Cali will see a repeat of what happened before but on a much larger scale b/c of the increase in popularity if exotic loans. I don't do much in Cali unless it's a referral, and just had one where they bought a place for 1.4 million 3 years ago, got it appaised and lender cut the value back on their review to where the deal wasn't doable, lenders are getting extremely strict on subprime in general and the Cali, FL, AZ etc markets.

FL has a big issue with property taxes though, especially if your waterfront property. Did you hear about how they were talking about increasing FL sales tax to 8.5% to cut back on property taxes where people would pay little to no tax whether you had a regular home or mansion on the beach. Sounds good on paper, but I don't think it will work out and cover the loss difference of no property tax.

BTW Scott your a baller so hurry up and cash out and bring my Zonda over you promised:p
 
Surfer, its so scary you have no idea how close you are on it. I deal with 32 states of their department of bankings/finance including Florida. Hell, I have a friend who she is in a neg. am loan in Dawsonville, Ga of all places. Granted the loan is new and shes waiting on a huge inheritance and wants to pay the loan off. I told her after 5-6 years, she will be upside down and really wont be able to get out of the loan. Appreciation growth rate is not growing as fast any more as the interest is accruing. Thats a scary situation. If you remember back in the 60s/70s (I'm 30, so I'm only talking beyond my years here, but from knowledge of the business) when the federal govt started the FHA loan program to get out of the neg am loans and lower interest rates then a conventional 30yr term was at the time.

Now, we're right back into the same situation, but on a much larger scale. You have hundreds of billions of dollars in loans compared to an avg loan amount in the 60s/70s of 35-45k. Now your average is prolly closer to 300k. Huge difference.

The secondary market (which is tied to the primary market in more ways then one) is in for a rude awakening in my opinion in the next 12-24 months.

I got an email from my account rep from Decision One mortgage the other day. 95% ltv loan for 680 credit score stated income/stated assetts but needed 2 months PITI for 6.99% on a 3/27 term. Granted, loan amount needed to be 250k, but damn man. That rate kicks major ass! You're competing for conventional rates for a stated 1099 borrower with 680+ score with no pmi. WOW.. just WOW!

I'm so glad I'm out of retail loans right now. I know I've missd out on alot of money the past 3-5 years, but I don't miss the stress of possibly doing a bad deal and not knowing about it and end up in prison.

This is a great thread ya'll. :) So much good advice and knowledge around here.
 
Get a kick out of this: The Mortgage Lender Implode-O-Meter - related to subprime lending, subprime mortgages, lending fraud, predatory lending, housing bubble, mortgage banking, foreclosures, debt, consolidation, lawyers, class-action lawsuits scary indeed. And thats the well known ones, plenty of other small timers no listed.

FHA is going to be doing 100% soon though, problem is not many qualify for FHA anyway and plus with loan amounts down here its usually not possible anyway (unless say a purchase and their putting a ton down, but if you have good credit I can kill FHA rates all day long). I personally love Wells Fargo and send basically all my a-paper and subprime stuff to them. Tougher ones (talking cluster f' deals) send to Option One who were Correspondent with. Got 300 lenders signed up but use a handful lol. Though in 2 weeks we'll be HUD approved for FHA as I've had some deals like out in GA that could have gone FHA on better terms.

My purchase business is building up and getting more into Commercial, don't bother much with refi's unless its a referral. Commercial is much funner, more pay, and little competition as you better know what your doing or you'll be cut fast lol.

I say by the end of 07' Stated deals will be almost nonexistant unless for self-employed individuals (W2 will be full or no doc/ratio), which it should be anyway, no doc is usually on .25 higher in rate and you won't have the risk of "lying" about income). 100% will go bye bye, most lenders have already gotten rid of it, and the others that still offer it have upped their requirements way higher and stricter. Subprime is going to be like a Boa Constrictor on it's prey, very choked. Lenders etc are basically disregarding the limit on 4506t being pulled which is normally 30-60 days, their pulling it at will or if you default and if they see the declared income is not whats "stated".....time for some Bubba loving:D. They pulled it anyways if you defaulted, but more so now a check process kinda like an assembly line in a factory where they check every few items for consistancy.
 
[FONT=Verdana, Arial, Helvetica][FONT=Verdana, Arial, Helvetica] NEW YORK (MarketWatch) -- Government-sponsored mortgage marketer Freddie Mac is the latest company to weigh in on the growing concern over lending to unqualified homebuyers, saying Tuesday it's tightening its standards for buying mortgages held by such borrowers.

Shockwaves have been rippling through financial markets as more signs emerge that relaxed lending standards during the housing boom of recent years are leading to escalating defaults and rising losses for lenders and owners of securities backed by such loans.


Among smaller lenders, the credit crunch in the market for low-end mortgages has left companies specializing in these subprime loans at the mercy of big financial institutions. Several have already filed for bankruptcy. See full story.

For its part, Freddie Mac said Tuesday that it would stop buying those mortgages that have "a high likelihood of excessive payment shock and possible foreclosure." Instead, the company plans to buy only subprime adjustable-rate mortgages, and securities backed by such loans, that have been qualified at the fully indexed and fully amortizing rate.

Freddie Mac also said it would limit the use of loans that don't require income verification or other documentation, and will recommend that lenders collect adequate escrow for taxes and insurance payments.

Moreover, the company said it's developing new fixed-rate and hybrid adjustable-rate mortgages with the aim of giving lenders "more choices to offer subprime borrowers."

The firm said its new requirements cover mortgages known as 2/28 and 3/27 hybrid ARMs, which currently make up about three-quarters of the subprime market.

Specifically, Freddie Mac said it will require that borrowers applying for these products be underwritten at the fully indexed and amortizing rate, as opposed to the initial "teaser" rate -- often several percentage points below the actual rate for most of the life of the loan.

The company also will limit use of low-documentation loans, so-called "no income verification" products in combination with the 2/28 and 3/27 hybrid arms.

In addition, the company won't purchase "no income, no asset" documentation loans and will limit so-called "stated income, stated assets" products to borrowers whose incomes derive from hard-to-verify sources, such as self-employed persons and those who participate in the cash economy, the firm said in a press release.

"There will be a reasonableness standard for stated incomes," Freddie Mac concluded.


****Just what I thought would eventually happen, Stated Income is going bye bye for the most part with W2's, stated should have never been offered for W2 and is only applicable in rare cirumstances for W2's. That's like leaving the key in a Lamborghini, with the door open and sign on it saying "Steal Me", people will abuse what they are able to ;). I just finished a long email going back and forth with a couple who wants to do a purchase under an LLC, they don't meet the credit requirments and are W2 yet say they want to go stated, when I told them I couldn't they didn't understand why. So we've been conversing back and forth, finally said at the end when your home is taken away and your meeting with Bubba the Luva, you'll know why I said what I said. Of course I said it in a joking way as she is nice and only wants to deal with me, just hard to make people understand exactly how complicated it is.
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