Homestead mailing list

["Lisa K.V. Perry" <lisakvperry AT gmail.com>]

On Thu, Mar 6, 2008 at 12:03 PM, <Clansgian AT wmconnect.com> wrote:

>
> Gene, some of these people were saying this was going to happen, that it
> was
> inevitable, back in 2002 or before.  During the feeding frenzy of the
> Housing
> Bubble, they predicted, with data and analysis to back it up, that right
> now
> housing would be crashing and why.


As a mortgage broker then and one interested in such things, I read the
economic data, looked at the plethora of options of 100%+ loans, Adjustable
Rate (ARMs) & Option ARM loans and concluded I needed to be out of the
mortgage business. First problem was that I didn't agree w/ ARM loans when
the interest on fixed rate loans were very close. Any loan over and above
100% (and the # of kinds of 100% loans) were just nuts. I did foresee this
"crash" this coming, but of course not to the extent that has occurred thus
far or will be when all is said and done.

I'm more thankful w/ each passing month that I am a *former* mortgage
broker. Not that being a Foster Care Provider is the be all and end all,
it's not, but for me it's more rewarding overall and comes w/ a steady,
monthly paycheck.

There was a nice product by the USDA, a Rural Development loan for 100%.
Could get a mortgage for up to the value on the appraisal, so in some
instances the loan was 101% or up to 102%. That 'extra' was applied towards
closing costs. I'm trying to recall, but I think the max loan for this
product then was $150k, so even a few years ago you could not buy a
McMansion on this product. Manufactured housing (double-wides) did not
qualify and the max amount of land was 5 acres. So though it was a 'rural'
product, if the home you wanted to buy was on 6 or 10+ acres, you could not
use this loan product. I always thought that was strange. I assisted several
customers to get into their first home w/ this loan product.

A couple years ago the local Chase rep who got credit when I closed a RD
loan made a $1 bet w/ me that some of my customers were in foreclosure. I
took that bet and explained that the people in my county have very high
integrity, they scraped by and made their living and  paid their bills. I
won the bet. All the RD loans were paid and current. The dollar bill never
arrived. I'm sure those loans are still paid and current, I'd bet on it
again today. Those were the only 100% loans I did. Most of the customers
were under 25-30 years old and thrilled to become homeowners.

Lisa