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Toxic Loans

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Are Toxic Loans Coming Back?

Our good friends at Realty Times report that some in the mortgage industry believe that no-doc loans and other forms of toxic finance “may soon be making a comeback” and that “some people can’t wait for the no-doc loans.” Really? I have no doubt that some people would be elated by the return of liar […]

July 20th, 2009 | | 0 comments | Continued
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Bankruptcy Fables Your Lenders Love

Should bankruptcy judges have the right to modify home mortgages? Would that be fair? Or unfair? It’s a political question, of course, and when the time came for the Senate to vote in April the count was 51-to-45 against a measure would give judges the right to change home loan terms and rates. For the […]

May 4th, 2009 | | 0 comments | Continued
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Mortgages & The Unnecessary Crisis

July 14, 2008 should be remembered as a notable date in the long history of mortgage lending. The federal government gingerly stuck its regulatory foot into the warm waters of consumer advocacy and for the first time enacted rules which would protect borrowers. Not all borrowers, of course, and nothing that would materially disturb the […]

December 31st, 2008 | | 0 comments | Continued
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How Paper Mortgage Losses Turned Real

The question that keeps coming up is this: If only a small portion of all mortgages are failing how come the general financial impact has been so enormous? To resolve this mystery, let’s go back to the 1970s when the mortgage-backed security — the MBS — was developed. The MBS was a financial device designed […]

December 15th, 2008 | | 0 comments | Continued
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Why Aren’t Predatory Loans Illegal?

“Nationally and internationally, we must be on guard against predatory lending. It is nothing more than a scam, a crime, a lie.” Alphonso Jackson, former HUD Secretary It’s doubtful that anyone who has ever looked at the mortgage industry would disagree with the sentiments offered by Mr. Jackson. Predatory loans are terrible, a scam and […]

October 4th, 2008 | | 1 comment | Continued
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Should We Bring Back Ozzie & Harriet Loans?

It was in 2005 that Bill Dallas — then president and CEO of Ownit Mortgage Solutions, at the time on one of the 15 largest subprime mortgage lenders in the country — said “underwriting guidelines developed in the 1950s don’t address the needs of today’s homebuyers and brokers. Loans that met the needs of Ozzie […]

September 26th, 2008 | | 0 comments | Continued
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Why Have Piggyback Mortgages Disappeared?

We usually define a “conventional” mortgage as financing with 20 percent down. Since most people don’t happen to have 20 down much less 20 percent plus closing costs, there has always been a market for mortgages that somehow require fewer dollars up front. The way you get loans with less down is to find a […]

September 20th, 2008 | | 0 comments | Continued
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The Illusion of Mortgage Assets

With newsstands dominated by scary headlines, Hollywood break-ups and still more diet plans, Harper’s magazine is typically somber and understated. However, for those with an interest in real estate the May 2006 issue offered a jarring cover story that’s tough to ignore: “The New Road to Serfdom: An illustrated guide to the coming real estate […]

September 19th, 2008 | | 0 comments | Continued
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Foreclosures — No Worries, No Vision

The lending community will plainly tell you that foreclosures are on the rise — in part because of rising interest levels — but don’t worry. According to the party line, there’s no need for alarm because the problem is contained to subprime loans and just a few states. For example, John Robbins, Chairman of the […]

September 19th, 2008 | | 0 comments | Continued
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Foreclosure Numbers at New Highs: Are Toxic Loans To Blame?

Foreclosures used to be a rarity and for the most part that’s still the case. As of the second quarter of 2008 only about 2.75 percent of all loans were in the process of being foreclosed, according to the Mortgage Bankers Association. That term “in the process of being foreclosed” is important. Neither borrowers nor […]

September 19th, 2008 | | 0 comments | Continued