When I had my mortgage company, I verified income, assets etc, to make sure the applicant could afford the mortgage. I didn't care if the lender said it were to be a "no doc" or "stated" loan. I wanted to make sure the client would not be in a position to foreclose in a year.
When the New York State bank examiner came in to audit my company, as part of the State Banking Department protocol, she said she was writing me up for exceptions because I had information in the file the lenders did not require. I said I wanted to make certain the client could afford the loan. She said it was up to the bank financing the loan to take that risk.
Understand, I was a 35 year traditional retail banker. Sub-prime loans were nothing I ever dealt with. All the loans I ever wrote in the bank were considered "A" paper. Credit scores were in the high 600s and income conformed to National Standards as set forth by Fannie Mae.
All applications we processed in my company were on the standard 1003 form that Fannie Mae required, even if the loan were going to be bought by a sub-prime bank. We were encouraged to have the client lie on the application, which was an anathema to me. But, in order to have the lender buy the loan, we did what the lender wanted.
But my files had all information as the client truly looked: poor credit, true income, bank and pension statements with real dollars. Hence, the exceptions from the State Regulator.
So now, we are facing the same disaster again, as reported in the Investors Business Daily. It seems that the federal government, by way of the corrupt Obama Administration-directed Federal National Mortgage Administration, otherwise known as Fannie Mae, wants banks and others to make high risk loans to high risk immigrants.
Yes, I am sure this will work out well. That statement, friends, is dripping with sarcasm.
Fannie Mae and Freddie Mac, the two quasi-government private entities (if that is actually possible) truly are corrupt and don't care because the directors know that in the end, if the program fails, and it will, the taxpayer will foot the bill. This tune was played before and it did not work out well in 2007 and 2008, did it?
By the time these loans blow up, Obama will be gone, or a at least a real lame duck like Bush was in 2008, and so will most of the stooges forcing lenders to make these unqualified loans. But my concern here also is with the Congress, which, by the way, is, according to the Constitution, supposed to oversee the Department of the Treasury, the Department of Housing and Urban Development and other entities responsible for the safety and security of this country's monetary and fiscal policies.
Instead, those Members are passing bogus legislation, all for a "show", they know the President will veto pertaining to another ponzi scheme foisted onto this country called Obamacare. After all, that is Obama's defining signature legislation. He most certainly wants that nightmare to remain. He has no other real "accomplishments" he can point to.
Oh, and one other thing...
If you think your savings, certificates of deposit or other FDIC - insured accounts are safe and secure, you are sadly mistaken. The way the banks have been regulated lately, since the Dodd-Frank banking bill was passed by the Democrat-controlled Congress in 2010 and signed by the fool in the White House, the entire banking industry, and related ancillary industries, is stacked on a house of cards.
If you thought TARP was a bad idea back in October, 2008 and a gift to the banking industry, you are right. But Dodd-Frank made it all permanent. If a bank deemed "too big to fail" actually fails, it's all coming down. Quickly.
So, just remember you read it here first. And remember that Investors Business Daily told you the disaster about to befall the housing industry.
If you believe the government that this is a good idea and a great investment opportunity, in less than six months your 401-k will reveal you were duped by the biggest fraud ever to be elected to the Office of President, and the stock market will be, once again, under 10,000.
History, my friends, has this nasty habit of repeating itself because we don't want to believe this axiom: the definition of insanity is repeating the same actions again and again, and expecting a different result.
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