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FBI probing the mortgage industry

 
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gleek
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FBI probing the mortgage industry
« on: January 29, 2008, 10:43:17 PM »

Link

I have to wonder if this is going to turn into this decade's S&L scandal.
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Aske
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Re: FBI probing the mortgage industry
« Reply #1 on: January 29, 2008, 10:47:55 PM »

what?  multi-billion $ korprations wurkin' to screw over average 'merkans ?   no way!   viva tax cuts for the rich!  viva korprit tax breaks!  viva 'merkan capitalism !
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Russia has invaded a sovereign neighboring state and threatens a democratic government elected by its people. Such an action is unacceptable in the 21st century.
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Aske
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Re: FBI probing the mortgage industry
« Reply #2 on: January 29, 2008, 10:49:12 PM »

http://www.slate.com/id/2182709/  oopsy
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Russia has invaded a sovereign neighboring state and threatens a democratic government elected by its people. Such an action is unacceptable in the 21st century.
--  Chimpy McFlightsuit, CEO of Bu$hco Industries of 'Merka
gleek
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Re: FBI probing the mortgage industry
« Reply #3 on: January 29, 2008, 11:22:17 PM »


So the lenders brought this mess on themselves by lobbying against laws that might have saved their own asses.

And look who was getting his palms greased in the process.

Quote
Some of the giving by Ameriquest executives and associates was high-profile. President Bush received more than $200,000 for his 2004 re-election campaign, and Ameriquest founder Roland Arnall and his wife, Dawn, contributed more than $5 million to political organizations that backed the president. Last year, President Bush appointed Mr. Arnall ambassador to the Netherlands, and his wife took over as chairman of Ameriquest's parent company.

Of course, Bush is probably going propose a bailout of these companies (although it's too late for Ameriquest since they've already gone belly-up).
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Clive
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Re: FBI probing the mortgage industry
« Reply #4 on: January 29, 2008, 11:30:23 PM »

That article is an obvious lie.  Everyone knows that the Republicans are the party of smaller government and less federal intrusion.
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birdymaker
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Re: FBI probing the mortgage industry
« Reply #5 on: January 30, 2008, 05:40:41 AM »

That article is an obvious lie.  Everyone knows that the Republicans are the party of smaller government and less federal intrusion.

those were the good old days. Tears
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Re: FBI probing the mortgage industry
« Reply #6 on: January 30, 2008, 06:43:34 AM »

Something I've been wondering, wouldn't most of these sub-prime mortgages have required PMI? If so, wouldn't it be the insurance companies holding the bag instead of the people holding the mortgages?
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gleek
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Re: FBI probing the mortgage industry
« Reply #7 on: January 30, 2008, 07:54:40 AM »

Something I've been wondering, wouldn't most of these sub-prime mortgages have required PMI? If so, wouldn't it be the insurance companies holding the bag instead of the people holding the mortgages?

PMI kicks in after foreclosure and the lender sells the property. PMI covers the lenders--not the borrowers. Yet it's the borrower that has to pay the premiums.
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birdymaker
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Re: FBI probing the mortgage industry
« Reply #8 on: January 30, 2008, 08:37:28 AM »

that will be the next  Air quotes crisis Air quotes
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Re: FBI probing the mortgage industry
« Reply #9 on: January 30, 2008, 08:45:04 AM »

Something I've been wondering, wouldn't most of these sub-prime mortgages have required PMI? If so, wouldn't it be the insurance companies holding the bag instead of the people holding the mortgages?

PMI kicks in after foreclosure and the lender sells the property. PMI covers the lenders--not the borrowers. Yet it's the borrower that has to pay the premiums.

I understand how PMI works.  By "people holding the mortgages," I meant lenders.

So, aren't the lenders covered?  Why would they be the ones suffering the loss in this mess?  Unless, for some reason, they didn't require PMI or they're self-insured.
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gleek
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Re: FBI probing the mortgage industry
« Reply #10 on: January 30, 2008, 09:03:18 AM »

Something I've been wondering, wouldn't most of these sub-prime mortgages have required PMI? If so, wouldn't it be the insurance companies holding the bag instead of the people holding the mortgages?

PMI kicks in after foreclosure and the lender sells the property. PMI covers the lenders--not the borrowers. Yet it's the borrower that has to pay the premiums.

I understand how PMI works.  By "people holding the mortgages," I meant lenders.

So, aren't the lenders covered?  Why would they be the ones suffering the loss in this mess?  Unless, for some reason, they didn't require PMI or they're self-insured.

I would think that for these high-risk loans, the lenders paid for the mortgage insurance themselves if they didn't require that the borrowers carry the insurance. Big companies like Citigroup do self-insure in the sense that they operate their own mortgage insurance companies.


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gleek
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Re: FBI probing the mortgage industry
« Reply #11 on: January 30, 2008, 10:29:08 AM »

6-month charts for two companies that insure asset-backed securities created from sub-prime mortgages:




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Re: FBI probing the mortgage industry
« Reply #12 on: January 30, 2008, 11:00:15 AM »

IIRC, a lot of subprime lending involved creative ways around having to pay PMI and still buy with no money down.  Much of the crisis, AFAIK, stems from the fact that a lot of available capital  emboldened lenders to loan money to people who didn't really have the financial resources to own homes.

For example, Borrowers would take an 80% first mortgage and a 20% second, using the later has down payment to secure the first.  And both loans would be ridiculously low teaser rate ARM's.

I don't have a lot of sympathy for either the lenders or (defaulting) homeowners. 

I myself sold a home to a couple early in this boom who really had no business buying a home.  They rented from me and then offered to buy it.  He had a bankruptcy on his record, with no regular income, and she a relatively low paying job.  They were sort of a mess as renters in terms of fulfilling their obligation to pay rent in a timely fashion.  I had to call them early in the month on several occasions to get the rent.

Still, they somehow managed to get a loan, bought the home, and then defaulted within two years.

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stroh
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Re: FBI probing the mortgage industry
« Reply #13 on: January 30, 2008, 11:01:41 AM »

That graph is what my index is supposed to look like when I buy Dr. Bob Rotella's Practice Like A Pro System.
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Spartan
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Re: FBI probing the mortgage industry
« Reply #14 on: January 30, 2008, 11:04:26 AM »

IIRC, a lot of subprime lending involved creative ways around having to pay PMI and still buy with no money down.  Much of the crisis, AFAIK, stems from the fact that a lot of available capital  emboldened lenders to loan money to people who didn't really have the financial resources to own homes.


I would have thought these would be exactly the people to require PMI of.
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