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Black monday coming up?
SavannahLion:
I just had a conversation with an ex lender who bailed out of the industry a few years ago. The process by which a loan is done behind the scenes is eye popping to say the least. It explains a lot of the behavior some of our lenders were doing and pretty much shatters the commonly accepted concepts.
Based on that particular discussion, I don't believe that this whole business is as black and white as either shmokes or ChadTower makes it out to be.
One interesting aspect is how the lender (or the manager or whomever) will process the loan application. Upon review of the application the lender will note that the application has zero chance to qualify. Rather than kicking the application back with a, "so sorry." The lender will alter the application (without knowledge of the borrowers apparently) to guarantee the loan. This would explain why we (actually my not yet girlfriend. I was just along for the ride) would get amounts of 20% or more over what we were asking, or able to even afford. The lenders we were dealing with tweaking the numbers!
To be fair, he has told me stories where the borrowers would put pressure on the lenders to tweak those numbers as well.
For every borrower who is culpable, I'm sure there's a matching number who are not.
patrickl:
Just came across some charts.
(chart from page 21 in this report)
So apparently wether the mortgage was ARM or Fixed isn't the biggest issue. It's more caused by lending money to bad creditors.
and then probably mostly in area's where house prices were going up a lot:
HaRuMaN:
^^ your chart there only goes to Q1 2006. Foreclosures have spiked since then.
patrickl:
Well the chart shows more the difference between prime vs sub prime. I doubt a few months more would have made a difference there.
Actually I saw a newer chart too. It showed that recently (thus after the spike you mentioned) foreclosures were decreasing but reposessions were now increasing. I think you can find it on the site you get by clicking on the foreclosure map.
patrickl:
--- Quote ---NEW YORK - In a sign of the times, the National Debt Clock in New York City has run out of digits to record the growing figure. As a short-term fix, the digital dollar sign on the billboard-style clock near Times Square has been switched to a figure — the "1" in $10 trillion. It's marking the federal government's current debt at about $10.2 trillion.
--- End quote ---
NYC National Debt Clock runs out of digits
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