Liars Loans Turning Into Liars Reworked Mortgages?
Liars loans were the rage way back in 2004 and 2005 when banks relaxed their lending standards. You remember, fill out this application and put whatever you want in the income line, we will not even check to make sure it is real. You remember:
Nudge, Nudge, Wink, Wink…
Now we are hitting the second stage of the process. As these subprime and Alt-A loans are blowing up everywhere, the banks got the Federal Government to step in with a 100 billion dollar program to help troubled borrowers.
But the banks do not have the people to handle all of the work.
The very same banks that cut corners in lending are now cutting corners on reworking the 
mortgages. Instead of giving them a proper review (as they should of in the first place) they are putting systems in to streamline the process.
Streamline, Yeah that’s the ticket.
So now the very same people that were enticed to unethically borrow money are now going to be given the opportunity to game the system and get a lower interest rate and balance with taxpayer’s money. All because the banks will not do the right thing and put in proper safeguards for the sake of saving some of their money.
Hey, it is only taxpayer money, if the banks squander it doing the same half assed, piss poor job of screening, who cares.
It is just what they said about securitized mortgages and no one got hurt there, right?
Right?
AAUGH…
Now you’d think that the bailout plans would have safety catches for this sort of thing, like the banks would look at your income and expenses and figure out that you are actually capable of living up to your responsibilities. But as the volume of troubled loans grows, the bailout plans are getting “streamlined.” That’s the word I keep hearing and reading. Industry and government officials are trying to “streamline” the process because they simply don’t have the manpower to go loan by loan. So if you fit a certain formula of negative equity on your home and a variable loan product, you can probably streamline your way into a better deal, even if you don’t really need one. via Realty Check with Diana Olick
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Comment by Tony Sena on 7 November 2008:
I would expect anything less from the banks!!! Don’t get me started on the lack of personnel at the banks handling REOs and Short Sales!!!
Comment by JM on 17 November 2008:
By the way, homeowners trying to get short sale approval should be aware that lenders are comparing the initial loan application to the financial worksheet submitted in the short sale package. If there are inconsistencies in the financial information submitted, some lenders are pursuing fraud charges against the homeowner.
Comment by Jerry W on 19 January 2009:
It is a very slow thing and will take years if the Government keeps trying to prop up the prices on these things. It takes 4 times the time and money to straighten out a screw up than to just do it right in the first place. They are losers and somebody has to take the loss and not the taxpayers. I suspect that a large percentage of the houses went to flippers who are not going to repay anyway. They should be prosecuted along with the person who made the loan. If an individual made a liar loan they don’t deserve a house they should be prosecuted along with the lender also. This thing WILL NOT turn around until the G figures out, even they cannot prop up the prices on these losers. GUESS WHAT THEY WILL NOT GO UP IN VALUE ! IS ANYBODY SMART ENOUGH TO FIGURE THAT REAL ESTATE ALSO DEPRECIATES ! A Big Big factor particularly in houses is maintainence of the asset and supply & demand in the market place. Will they go up in value ove 10 years? Who Knows? For now they have to be sold for what their “cash as is where is value” is NOW, that will be the bottom and then it will go up from there. It is all a matter of value. The only reason the houses sold for the prices they sold for, is because of the phoney financing, false appraisals, and liar loans perpertrated by liars & thieves in the building and finanancing industry. The whole thing was allowed by an inept, moron Congress who was being paid off by the crooked industries they were supposed to control. Does anybody seriously think that a Banker would make a 30 year fixed interest rate loan to someone if they couldn’t lay it off to the moron government? They learned that lesson back in the 80’s. Apparently the morons in Congress didn’t. Of course they didn’t care because it wasn’t their money either. It’s sickening to see these very smart crooks & con men be bailed out with our money, when they should be going to prison. NEXT UP Credit card companies When will it stop.