Do Mortgage Brokers Share Some Blame?

January 4th, 2006 • Related • Filed Under

Another F@cked Borrower, a blogger not a designation, has a great post on how poorly the general population understands math and how greedy mortgage brokers, which he is one, will do anything to get a loan through and get their commission.

I am just sick and tired of the crappy borrowers that lenders will give millions of dollars to!! Don’t believe me?!?!? I was in an office today and I wrote down the highlights off of one of the flyers there. Try these on for size:

This lender will do 100% stated interest only loans to 1.4 million with a 620 FICO score.
They will do 90% stated interest only loans to 2.4 million with a 620 FICO score.
They will do 95% stated interest only on NON-OWNER OCCUPIED housing.

The thing is, I don’t know who is buying these loans?!?? Who in their right mind would give somebody with a 620 fico score, a loan to 1.4 million with NO money down?!?!? The only person I think wins in a loan like this, is the loan officer/broker who makes 20-30k in fees doing the deal. See my post on leverage if you haven’t already for a more in depth perspective.- Another F@CKED Borrower.

Read the whole post, he did a great job outlining a major issue in the housing market. Easy credit is a great thing when the world is going well, but it has a terrible boomerang effect when the economy, both personal and societal, turns bad.

Related posts:
FHA New Lending Standards For Mortgages and Home Refinances

Mortgage Bankers Association Propose Dismantling of Freddie, Fannie

Federal Judge To Mortgage Companies: Show Paperwork or There is No Mortgage

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