Comments on: Failure To Escrow SubPrime Another Nail In Borrowers Coffin

By: dman

dman — Tue, 03 Apr 2007 21:50:50 +0000

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By: Giorgio Campo

Giorgio Campo — Sun, 01 Apr 2007 01:29:13 +0000

So “right on” z-mo-nay. Could not have said it better; as a lender in Chicago, I have literally placed near 1000’s (8 or 900 hundred for sure) of below prime borrowers and probably 70% did not escrow- and no adjustments to rate either. On the flipside, in “prime” lending situations, most lenders will not allow you the “luxury” of waiving escrows (for free) if you don’t bring @least 20% hard, cold equity to the table.

Most of these sub-prime lenders are pretty much defunct these days and the remaining, well, they are on that slippery slope or learning how to cope.

By: A Realty Group

A Realty Group — Fri, 30 Mar 2007 21:22:09 +0000

Eight Steps to Getting Your Finances in Order
1. Develop a family budget. Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses such as car repairs, illnesses, etc., as well as predictable costs such as rent.
2. Reduce your debt. Generally speaking, lenders look for a total debt load of no more than 36 percent of income. Since this figure includes your mortgage, which typically ranges between 25 and 28 percent of income, you need to get the rest of installment debt—car loans, student loans, revolving balances on credit cards—down to a between 8 and 10 percent of your total income.
3. Get a handle on expenses. You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.
Check out the school district. . . . http://www.ExchangeCA.com Eight Steps to Getting Your Finances in Order
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By: Austin Realtor's Wife

Austin Realtor's Wife — Fri, 30 Mar 2007 17:55:16 +0000

You know what happened? The bar was lowered for lending- which for that time period worked. It was a risk, we took it and not all risks pan out to be successes.

I don’t know that it was designed for the borrower to fail (although it does smell funny), but when the bar is lowered, this tends to happen. Imagine if the bar was lowered on becoming a REALTOR, say continuing education wasn’t required. THEN where would we be? We’d have any BillyBob (no offense if BillyBob reads this!) rolling around in his truck spouting law from 1970 with no regard to modern practice.

Bottom line, raising the bar on lending will begin soon, and will unfortunately penalize buyers that really need that help. Stinks.