Skip to Content.
Sympa Menu

homestead - Re: [Homestead] The Usury Business, How To Avoid Going To Jail

homestead AT lists.ibiblio.org

Subject: Homestead mailing list

List archive

Chronological Thread  
  • From: Lisa Perry <lkvp AT floydva.net>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] The Usury Business, How To Avoid Going To Jail
  • Date: Thu, 02 Sep 2004 12:56:06 -0400

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.

Lisa
...off my soapbox







Archive powered by MHonArc 2.6.24.

Top of Page