[Homestead] The Usury Business, How To Avoid Going To Jail

Lisa Perry lkvp at floydva.net
Thu Sep 2 12:56:06 EDT 2004

Gene GeRue wrote:

> My view is that money lending is the world's third oldest profession 
> and is one that will always be with our foolish, impatient and 
> opportunistic species. (snip) Money lenders have fierce focus, 
> powerful political pull, are insatiable and constantly seek greater 
> pastures. (snip) Money lenders are about making more and more money. 
> (snip)

Wow.  I'm glad to soon be able to gracefully exit the third oldest 
profession.  I don't resemble the above point of view, but I could feel 
slimy if I let myself.  We're not all greedy nor opportunistic--even 
when there's a bad apple in every profession. 

> I was amused to read yesterday about the growing push for forty-year 
> amortized real estate loans. Amused not for the term but for the 
> seductive suggestion that stretching a loan out ten years longer makes 
> sense for consumers. We already have interest-only loans. (snip) Trust 
> me, lenders will continue to be inventive, persistent and successful 
> in their quest for more business. Their business plan includes making 
> more loans. This they will do by any means.

I agree.  The refi business is all but gone and lenders are trying to 
keep business steady with purchase and/or construction loans, so they 
make new programs to help the in-debt-up-to-their-eyeballs average U.S. 
consumer purchase an expensive house that most of them are stretched to 
buy in the first place (that doesn't apply to anyone on this list).  If 
the same average US consumer would be brave and jump off the 
more-bigger-better consumer track then perhaps things would change.  My 
parent company has begun to offer interest only loans, every other major 
lender out there already had them.  My customers haven't asked me about 
them...but it's only a matter of time.  It's a program I won't 
use--along with 40 year amortization.  Thirty years is long enough to be 
in debt and to have to be bringing in a paycheck to cover the mortgage.  
I view a 30 year mortgage like a good news/bad news situation; the good 
news is you've got your loan and can move into your (dream) home, the 
bad news is you have a 30 year commitment--and I hope you like your 
job.  It took me a long while to not think about that every time I 
closed a loan.  I tell my younger consumers how they can increase the 
principal payment and shorten the life of the loan--it helps me to sleep 
at night.

There is some scuttlebutt about what could happen to Fannie Mae and 
Freddie Mac, both of them being goverment sponsored organizations or 
entities, as the overnight lending rate is gradually raised by the 
Federal Reserve Board.  Fannie and Freddie have been in the news 
recently with various problems.  The speculation is as rates rise and 
consumers can't afford to pay their increased payment on their 
adjustable rate loans (which have become more popular in the last few 
years), they will begin to default.  If you throw in a housing bubble 
that could soften or burst in various sections of the country (which 
would make houses worth less than current values), that could only make 
the matter worse.

I don't belong in this business.  I landed in this profession 
unintentionally in 1992 when we moved to a new state and I enrolled  
with a temp agency and was given the assignment of loan processor for a 
mortgage company.  I became a permanent employee ten weeks later.  It 
didn't take long to learn the business and realize you made more money 
higher up the food chain so I became a mortgage broker/banker.  When the 
home addition is done, it won't be but another couple of months before 
we get our client and I can stop.  Hallelujah.

...off my soapbox

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