So this explains why almost all mortgage origination is going through federal programs.... To write prime mortgages I want 5.9-6%, and I really want it NOW, and no, I'm not swimming in these waters. Also, they have to be prime. I want 10% down, I want it in cash from the borrower, I want a housing inspection and MY appraisal, I want very good credit aside from exigencies, I want employment stability, I want housing stability, I want the borrower to have savings on hand for two months mortgage payments after closing, I want a record of the borrower saving, I want owner occupied, I want total mortgage payments 38% or under, and not out of range with comparable rents, I want mortgage insurance to 80% - in short, I don't want to write any mortgages in this market. I do not approve of screwing borrowers, and why should such a borrower pay me 6% for money when he can get it for 5% on the GSE market? The only ethical thing to do is pack my borrowers a lunch and send them down the road to inflict the losses on the taxpayers. As a taxpayer, I have mixed feelings about that....The US economy is all just propped up on an eroding foundation of tax revenues. Folks, this can not end well.
Saturday, February 27, 2010
Taxpayers are now in the mortgage business
...because a private sector lender can only lose money when rates are 5%. Read Maxed-Out Mama's analysis (scroll down to Feb 24):