Unintended Consequences

Comments

1
This is just proof of how heterosexual "marriage" is destroying America. See how straights behave when they get a divorce? They'd even crash the housing market in an effort to push their perverted lifestyle choice on the rest of us.

2
But this says it requires you document things, not that banks require income. The problem was dishonest lenders and borrows, and they're trying to keep them honest by making them show they have the income they claim.

Did you pretend to have income you didn't for your mortgage, or did you just get one based on equity? Because the latter still sounds allowed.
3
I would not call this "unintended consequences". Low documentation loans were definately part of the problem. Now the pendulum has swung to the other extreme. During the depths of the financial crisis I had to get a mortgage and the banks required reams of documentation, which they scrutinized, despite having a very good credit score. I even had to provide yet another pay stub just before closing to prove I still had a job.
4
Waah, just because you personally profited from a corrupt scheme all of a sudden makes it bad that the CFPB wants to fix it?

And for what? A big wooden box? Why is it so important that th federal government encourage people to buy gigantic wooden boxes? I thought you were an urbanist.
5
Ah, OK, looks like there are some other provisions:
Wait there is more. To qualify for a mortgage, consumers must have enough income and assets to repay the loan, and lenders must determine that includes both principal and interest over the long term, not a discounted introductory period.

So maybe this would affect you after all.
6
Credit should only be given to the credit worthy. Suddenly Goldensteinemberg wants to go back to the good ol' days of any idiot with a pulse getting a loan. In my parents day you had to go to a bank and get interviewed to receive a credit card (especially an Amex). Now they line up like cattle at Costco and hand them out. What's next Goldy, gonna defend payday loans?

Jesus, you can't fucking win with you morons.

Too much credit? Bitch and complain!

Too little credit? Bitch and complain!

By the way, just closed on a 30 yr fixed at 3.3% with no closing costs. Life is sweet for the credit worthy.
7
@2 @5 I was not asked to show income. My social security number and an appraisal was all that was required. And I only paid 0.125 percent above the going rate for the privilege.

8
@6
Whassamatta? Can't make a comment on the post without taking cheap shots at Jews?
9
@7 I know it served you but reread your comment. To the rest of us it is clear that if a million other people got what you got, the market would do exactly what it did.
10
"To qualify for a mortgage, consumers must have enough income and assets to repay the loan, and lenders must determine that includes both principal and interest over the long term, not a discounted introductory period."

Yes. Truely unreasonable...

11
Of course Goldy is basically admitting the problem with the kind of tight regulation he always espouses (until it affects him of course). It punishes some of those who can be trusted to make proper decisions when given the choice or, god forbid, the freedom. Tough shit.
12
It's not about punishing "abuse". It's about making sure borrowers have the means to repay their loans. That means income or assets. Good intentions, a good credit score and being an upstanding citizen don't pay the bills on their own as we've seen all too often over the past few years.

When everybody assumed housing prices could only go up, the house was considered enough of an asset because banks and borrowers believed it could always be sold for more than what was owed.

Once that assumption was shattered, the mortgaged home could no longer be considered adequate means for repaying a mortgage. So now people need to show proof of other assets or most likely income.
13
Funny how people like @6 urge others with insufficient income to buy ramen on sale and cancel cable/internet/cell phones, yet brag about their mortgages.

I can sock-puppet a fiscally conservative position better than that: live frugally, save & invest, pay cash for your home when you can actually afford it. Your next step up after that comes with the money you save while not paying a mortgage.
14
Documentation requirements overall are a good thing, but the requirement of "guaranteed" income most banks have started requesting is going a bit too far, and it does block self-employed from getting a house.

WTF is a "guaranteed" income anyway? Anyone can quit, be fired, or be "restructured" out of a job. How is that more reliable than a self-employed professional's income?

/not from the article, recent personal experience. Excellent credit, 20% down plus enough in the bank to pay a year ahead, and I had to ask my father to co-sign.

15
The world is a shitty place. It would be nice if it was fair, but it's not. Some people should not own a house because they will never be able to pay for it. Banks should not give them loans.

Owning a house is not the be-all, end-all of life. People should realize and accept that (especially realtors and mortgage lenders, they need to wake up and back the fuck off).
16
" urge others with insufficient income to buy ramen on sale and cancel cable/internet/cell phones, yet brag about their mortgages."

Maybe that's because we spent years eating ramen and living within my means to get to this point?

" pay cash for your home when you can actually afford it."

Why pay cash when borrowing the money at 3%, while investing our savings at a higher return (rather than sinking them into my home's equity) is a better return at this point?

Credit should be for the credit worthy. What's so complicated about that? I would be more than happy to see the payday business closed.
17
Documentation requirements are good overall, but the requirement of documented "guaranteed" income most banks are requesting is going too far, and keep self-employed professionals from buying.

WTF is a "guaranteed" income anyway? Anyone can quit, be fired, or be "restructured" out of a job. How is that more reliable than a self-employed professional's income?

/not from the article, recent personal experience. Excellent credit, 20% down plus enough in the bank to pay a year ahead, and I had to ask my father to co-sign.

18
"and it does block self-employed from getting a house. "

No it doesn't. Provide 3-4 years worth of tax returns and a letter from your CPA and you're in like flynn.

"WTF is a "guaranteed" income anyway? Anyone can quit, be fired, or be "restructured" out of a job. How is that more reliable than a self-employed professional's income?"

Errrrr, it's called 'statistics'. Are you really that stupid that you don't know how banks figure out loan risks these days? Thankfully they have standards again.
19
@3
I would not call this "unintended consequences". Low documentation loans were definately part of the problem. Now the pendulum has swung to the other extreme. During the depths of the financial crisis I had to get a mortgage and the banks required reams of documentation, which they scrutinized, despite having a very good credit score. I even had to provide yet another pay stub just before closing to prove I still had a job.


This. We closed our mortgage in March 2012, and had to jump through an absolute storm of documentation and proof, practically to the level of genetic screening for a then-low 4.0125% fixed rate. We literally--because of the idiot selling bank badly dragging their heels on closing on the short for a tremendous loss they took--just squeaked into the end of the downturn. The house previously sold for about $380,000; we got it for $175.

No offense, Goldy, but part of the problem WAS people fudging details into mortgages they shouldn't have gotten. Not you, perhaps, but MANY.

Oh, Mister Jones, you earn $225 a week take-home? Splendid. Here is an adjustable rate mortgage--two in fact, one at zero money down--for that lovely $300,000 home. What's that? Yes, yes, interest rates are SO LOW. It will only cost you $700 a month to have this lovely home.

Fast forward to now, and that's $1800 a month in mortgage costs per month.
20
Low doc loans were a problem, and Goldy's magical unicorn anecdote does not disprove that.
21
"it's not the "low doc" loans that were the problem, but the dishonest lenders and borrowers who abused them."

Yep, and guns don't kill people, people kill people.
22
@21 exactly. Nothing like watching liberals complain about tighter banking regulation and standards.
23
Mehlman, you will never, ever be capable of finding your skankhole, sonny!

Again, we repeat: it wasn't the foreclosures which caused the meltdown, it was the ultra-leveraged bankster run, coupled with the largest insurance swindles (via those credit default swaps, or naked swaps) in human history, aided and severely abetted by LIBOR rate manipulation and ultra-leveraged speculation with unlimited commodity futures contracts, along with naked short selling collusion with DTCC's Stock Borrow Program, effectively shorting thousands of many thousands of the smaller, public companies out of existence, while they successfully lobbied for congressional legislation giving preference to small business loans to those small business ALREADY invested in by hedge funds and private equity firms (which is how they monopolize EVERYTHING, can you dig it?).

In other words, it was selling hundreds of trillions of dollars of debt on top of ALL TYPES OF LOANS.
24
@23 You forgot the role of Masons, the Bilateral Commission and chem trails.
25
@24, unregistered douchetard you should post your school scores just to verify that arithmetic was beyond your pathetic pea brain.
26
" you should post your school scores just to verify that arithmetic was beyond your pathetic pea brain."

Well, I am your manager here at the tin foil factory, so at a minimum you can assume they're higher than yours.
27
The reality is that you were a gamble, Goldie. If the banks make the same bet they did on you with thousands of others in similarly undocumented situations, they are going to loose a lot of those bets. If they loose too many and the bank goes under, which is exactly what happened to many of them.

Anyway, I hear you, these type of laws cut both ways. And there were other problems with the financial industry (e.g., marriage of lending and investment banking, irrationally high appraisals) that dramatically increased the banks' exposure to risks from bad loans.
28
@27 I don't know about that. I too did an undocumented loan from Chase, to refinance from 6 percent to 4.5 percent.

Still own the house. Almost all of it by this point.

Most of the so-called documentation just makes things take longer, quite frankly. The banks or credit unions making the loans should know their costumers.

Chase account was originally WaMu. I still have a Bank of America account that started off as Seafirst.
29
"The banks or credit unions making the loans should know their costumers."

Look, they are they not loaning money the way you do to your retarded cousin Jeff, who while a bit of lazy fuck, you know is good for a $50 spot loan for a Saturday night on the town.

Banks have tens of thousands of customers. You are just a fucking number in a computer, a computer that, thankfully, now has some tighter standards for loans. I know you're been told you're special since you were in kindergarten, and you always deserved that gold star that everyone got in class, but guess what? In the real world you are not fucking special and you actually have to earn that gold star, your self-esteem be damned.
30
My first mortgage was a bit under 2 years ago and I had to jump through some pretty insane hoops - lender pulled stuff out of my credit report from 10 years ago. I just barely scraped in there. Refi was a hell of a lot easier, even with their predictably conservative appraisal.

But, having friends in the process now, I still can't believe the lack of diligence I'm hearing about, i.e. closing on a building without the bank finding out about unpermitted work or that it was still in mediation on the last offer that fell through. That's some 2001 shit right there.