Georgia Mortgage FHA

Sorry Jeff! I had to do it …

If you were invited to a jaliggy (a great and wonderful picnic type party with music, games, food & drink) because they were giving away a new Cadillac to everyone who showed up you’d probably be highly interested in going. However if you read the fine print that says a jaliggy starts out by everyone (who ever was late on a payment and cannot bring proof of income and assets for the last two years) driving a nail through their big toe you wouldn’t (unless you are extremely odd) be nearly as interested in going unless you had never been late on a payment and had that documentation. However, even if you have those issues, to you the pain may be worth the gain just to get that car. Pain, in this case, is for people who are unworthy of highest regards because of their credit and work history.

Just because the press calls some forms of lending predatory or unethical doesn’t make it so. Yes, the broker and lender may have allowed 4 points in commission on the same loan they allowed just 1 point to a better borrower – that does NOT make it predatory. It costs far more to build a bridge over a canyon than to build a flat stretch of highway on the same amount of flat dirt. The press likes to call stated income loans mortgage fraud, too.

I don’t give much creed to stories or blogs on lending by people who don’t have a financial or banking background or education so biz rag articles only get me to more defend MY business than they do to believe what many authors mimic from other authors about lending practices because, quite frankly, most authors are going to be clueless about the process, the business economics and the industry. When I call them on a comment about “the mortgage industry” they say “we don’t mean you“. Listen, when they say things like “the mortgage industry” that’s ME. That is PERSONAL to ME. By saying “the industry” they are including KEN COOK and NOVATION MORTGAGE. When reports say unethical lending practices let’s name names – WHO is unethical? I mean name the COMPANY and the PERSON working for that company. It’s easy to say all purple people are too lazy to work and all green people are nothing but theives. Or all southerners are dumb-butt rednecks and all Californians are socialist-communists. But it’s not true.

Jeff says for every one of me (the Ken Cooks)? there are 100 unethical predators. I disagree completely because I know a lot of people in my industry and I would trust well over 95% of them with my own finances. Maybe we’ll get NAMB to give us some figures on how many predatory lenders/brokers there are. I can tell you this, though, if I’m outnumbered 100 to 1 then you need to be referring all of your clients to Novation Mortgage because somebody is getting hurt and we won’t hurt them.

You cited the report that predatory lending costs Americans over $9 billion a year. I submit that every penny of that could have been avoided by having only educated borrowers negotiating the contract. I push hard – VERY HARD – for licensing and testing of LOAN OFFICERS before they can ever accept their first application. But do you know who the BIG OFFENDERS are? Do you know that MORTGAGE BROKERS are held to stricter disclosures than CHARTERED BANKS? Do you know that federally chartered banks are exempted from disclosures that would land your neighborhood loan officer in prison for not providing?

I? AGREE THERE ARE PREDATORY LENDERS but I insist that market education is the key. You can arrest every predatory lender, burn their office down, strike their name from the phone book and two days later their is someone else there to “fill the gap”. Unless ignorance on credit and debt management is put before convicting predatory lenders it will never be stopped. Predation is where unethical scum in MY INDUSTRY takes advantage of an ignorant borrower and without wiping out that ignorance you’ll never stop predation in the lending industry.

Never.

If anyone has enough passion about lending practices to post here then they should have enough passion to help in the FREE and NON-OBLIGATED education of the general public using actual historical and statistical EVIDENCE – not just fears and hearsay.

I can further say that if regulations came into play which forced lenders to give the same treatment to high risk borrowers as low risk borrowers you’d have (a) almost every small lender get out of the industry and (b) a lot of people who could have owned homes no longer qualifying. There is predation – absolutely. But predation is not the leading cause of foreclosures and family hardships. The leading cause is non-prime lenders trying to make everyone happy by letting borrowers who otherwise could NEVER have owned a home have a shot at it. I mean get realistic: we are now allowing borrowers with a 580 middle score, mortgage lates, bankruptcy, judgment, medical charge offs and worse buy brand new homes with no down payment.

Isn’t that what the public wants – a shot at the American dream?

The sad truth is that in this welfare mentality state where big executives (I’m talking about ethical people who care) create thousands of jobs are lumped into the same category with liars and theives who overstate earnings are being eaten by the press because the press, that great socialist undercurrent rotting away at the core fiber of America, and the PRESS, my friend, is demanding that slobs, no gooders, uneducated spend thrifts receive the same treatment at the same price as those who care enough about themselves and their families to tenderly care for their financial well-being and credit worthiness.

ENOUGH IS ENOUGH.

Why don’t we just say to heck with the poor slobs with crappy credit and low income people? Let’s go back to requiring a 640 minimum middle score and 20% down? Let’s throw away all of the non-prime and alternative document loans. Because THAT’S WHAT IS GOING TO HAPPEN if these so called anti-predatory lending acts keep popping up without the representatives authoring them and voting on them listening to ME – I mean, the industry. I applaud Illinois for requiring borrowers to go to class before they go to closing – KUDOS! But as long as you have borrowers who don’t care about themselves and a lending industry still willing to help them then you will have HIGHER COST LOANS! I can make it really personal to any elected official voting on a law requiring lenders to further limit the cost of their high risk loans by providing examples from your world. Just call me – 828-354-4053

You want no predatory lending? Let’s get rid of PREDATORY BORROWERS too. And let’s get rid of unequal legislation letting federally chartered banks skate by secretly while mortgage lenders and brokers get fried under the microscope.

How much did MORTGAGE FRAUD cost the country in the same period as predatory lending cost $9 billion? (Which buy the way is subjective … that may not have all been predatory.) ONE BILLION that is DOCUMENTED! And we only uncover the tip of the iceberg because most mortgage fraud goes undetected for months or years. Furthermore, that figure only counts the cost in defaulted loans which have been positively tied to fraud. It doesn’t include the billions of dollars every year spent on Quality Control, appraisal reviews, automated fraud detection and the hours and hours they require.

BOTTOM LINE

If you want high risk borrowers to own real estate and you don’t want lenders to charge for the gamble then either (a) establish some kind of non governmental social fund that doesn’t steal out of my pocket to help pay closing costs and offset higher interest rates or (b) we’ll just go back to the way it was. 640 credit, no late payments, 35% DTI, 20% down and fully document income and assets.

Yes, I’m hot under the collar. But still smiling!? Something needs to be done but it MUST be the RIGHT thing so as to allow everyone access to good housing in America.

EDUCATE – DON’T LEGISLATE

— admin