The Mortgage Meltdown

**Wingfoot** · May 29th, 2011, 10:55 PM

The Mortgage Meltdown - 2011

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**Enjoythefall** · May 29th, 2011, 11:51 PM

That's scary. But when you build an economy on spending money that you don't have, and doesn't actually exist... I think it's bound to happen.

**locator00566** · May 30th, 2011, 08:16 AM

Another "the sky is falling" story from the media. New home construction is booming in my area and shows no sign of slowing down.

**UULC** · May 30th, 2011, 09:15 AM

Well in Florida it is dead. Our new Gov. Scott who promised 750,000 NEW job has actually let more people go with his cuts then he has created jobs.

**sprayandpray** · May 30th, 2011, 01:56 PM

I heard this week that 28% of all home sales are foreclosures. I have a house next door to me that has been vacant since Christmas. The Mortgage Co. hasn't even put a notice on the door. I'm thinking of changing the lock myself and renting it on a month -to-month basis.

**UULC** · May 30th, 2011, 02:32 PM

S & P be careful. we had several people doing that down here in Florida and our state attorney went after the ppl once the bank figured it out. They have arrested several people.

**Kurt** · June 2nd, 2011, 03:28 AM

One may get the best deals if he opts for a financial advisor who could give the precise advice regarding the financial matters in the long run and thereby help one take right decision at right time. So, if you have plans to opt for a financial advisor then do make a search about them online.

**ProfessionalLocator** · November 25th, 2011, 02:17 PM

The major problems with these mortgage defaults are worthy of invoking the RICO act.

The center point of the failed mortgages is the sub-prime lending market followed by adjustable rate mortgages.

First the sub-prime mortgages.

You go into a car dealer and pick out a nice new car, $35,000. But when you start to sign the papers you see that the price is $45,000 and ask why. The dealer says that since you have points on your driving record you are at risk to crash the car and must pay more to cover the risk.

The above does not happen becasue due to points on your license you pay higher insurance rates, not a high price for the car.

When you take out a mortgage what you are buying is money paid you pay for on an installment plan plus handling charges, interest.
IF your credit history makes you at risk charging more interest only increases the risk and is counter to making the bank's money secure. Instead you should be paying a higher rate on your mortgage insurance be it PMI or for FHA, etc.

Equally an adjustable rate mortgage where you only qualify for the initial rate is counter to securing the banks repayment for the money purchased.

To understand why this is done rather than raise insurance rates you have to understand how the mortgage market works.

The people in charge of lending the bank's money are not paid for making safer and more secure loans. They are paid by commission based on the gross amount of the loan often with the interest rate a factor. So the people in charge are paid more money if the write a greater number of loans with a high probability of failure.

Any push for legislative reform would come from the banking industry and it is to the industry advantage to have higher insurance rates for riskier borrowers. But with the employees of the banking industry, from load officer up to CEO, making money from gross amounts of sales they are more inclined to oppose such legislation.

**paintitnow** · November 25th, 2011, 09:23 PM

It is all greed. Same as the car dealerships. Their banks come back with a rate and they add some interest on and the dealerships gets some of your payment. The dealership gets all their money if a person makes the first two payments. After that the risk is all on the bank. A friend i know made $14-16K a year and was approved for a car loan up to $45K.

Fannie mac and fannie mae loans were all backed by the government. All these guys were only interested in their commissions or bonuses. Ctibank didn't even pull credit reports before issuing loans. Also they told people what they were qualified for and people to it to that limit. It was not always the amount they could afford. Wasn't PMI to insure they bank got their money if one defaulted before your loan was 80% of the value of the loan? The sup prime was just feasting on all the people that had poor credit and could not get a traditional loan. The old days one would have to have 20% down before one could get a loan. VA and FHA required less down but the inspections were tougher and requirements were stricter.

**[HAF]Foxtrot** · November 25th, 2011, 11:41 PM

www.infowars.com

Thats the website for unbiased truthful news. This housing collapse never really stopped. Sure in some areas it has slowly increased, but I have yet to see here in NC, or SC, or VA what it had in 2007 before this collapse is happening. From what I have heard from top economists not bought and paid for by Faux News, that the collapse of the USD will happen after the EU collapses and will make the great depression look like a boom era.