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Careless origination, not affordable housing goals, behind mortgage meltdown, Senator claims

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Mortgage Professional America | 30 Oct 2013, 06:39 AM Agree 0
A prominent member of the Senate Banking Committee insisted Tuesday that the housing meltdown was primarily caused by careless investment and defended the government's affordable housing goals
  • Cheryl M | | 30 Oct 2013, 08:33 AM Agree 0
    Warren needs to understand whether she's going to work in the past or bring herself into the present. We have enough reform, due to the past, now that we over that let's hear more from the women who doesn't hold a MLO license (pass the test 1st) to originate a mortgage and would not know what a 1003 is if pushed infront of her face. Thank you Ms Warren for once again putting the cart before the horse. Ms Warren the originator was offered a product to sell, how about looking at the industry/investors offering the products/mortgage programs to sell. Stop blaming the salesperson. We are beyond slapping mortgages against the wall and seeing if it sticks. Ms. Warren you've already allowed the "too big to fail" to do just that, not fail. As of January 1st 2014 new programs only allow the little guy to fail. Undo what you have in place for 2014 then we can talk. Maybe you should rent Death of Salesman by Arthur Miller you just co wrote your own version...
  • Paulsmoney@gmail.com | | 30 Oct 2013, 09:00 AM Agree 0
    What crap! Unaccountable damn politician.
  • fedup | | 30 Oct 2013, 09:12 AM Agree 0
    Cheryl, while the originator may have had a product to sell, was there no conscience? Ms Warren did not let the too big to fail, not fail. It was before her watch. What I can see now is the same mentality that got us there in the first place.......rules are made to be broken. The mentality is that they will figure out a way around the rules and do what they want, as they feel that they are so almightly powerful that they can buy their freedom. Nothing has changed, nor will it until the consequences cannot be bought off.
  • Joseph Lazzara | | 30 Oct 2013, 09:21 AM Agree 0
    Either she (the good old boy's Dem Mass Senator) is completely ignorant of the past Clinton/Janet Reno initiation of the housing fiasco or a sorry incompetent liar. I'm embarrassed to call her our senator; both of them for that matter!
  • Eric Timco | | 30 Oct 2013, 09:25 AM Agree 0
    This all starts with the government guarantee and insufficient goverance and control of FNMA and FHLMC, by the government. Brokers and Lenders for the most part just followed the rules stated by these agencies. Elizabeth Warren is a socialist wanting to feed as much money to the "takers" as possible. She is either ignorant of the true facts or a liar. You decide.
  • Joe in MN | | 30 Oct 2013, 09:32 AM Agree 0
    CARELESS ORIGINATIONS? WTF? If I were car salesman, that would be like blaming me for faulty braking systems. I am just the salesman. If a client walks in and says they want a Ford, I sell them a Ford. If they want a Chevy, I sell them a Chevy. If they qualify for the Ford or Chevy, they qualify. Please put the blame where the blame is due... The guy who makes the Fords and Chevy. DON'T BLAME THE SALESMAN.

    No Conscience... How dare you. You have no clue how many people who sat at my desk - being told by me NOT to buy a too expensive house who essentially flipped me the finger and said give me the mortgage...

    Don't forget, I as the salesman can NOT deny someone just because I thought they were stupid. Then I would get in trouble under the law. If they qualify for the program, they qualify for the program. Blame the guy who made the program rules, and no one but the guy who made the program rules...

    And while FedUp is on their high and might horse, how many people buy things everyday without regard to their own well being... a car, a house, of 10,000 pairs of shoes. I am NOT your keeper. It took two... They had to WANT a mortgage.. and I surely didn't hold a gun to anyones head to make them buy a house... #GetAClue
  • Dave M | | 30 Oct 2013, 09:34 AM Agree 0
    Cheryl - you should also understand that Sen. Warren's use of the term "originator" does not mean individual MLOs, but rather the companies they worked for. Those companies, in connection with the investors (especially Fannie and Freddie) loosened the rules for mortgage approval. So, Ms. Warren means precisely what you said with regard to "the industry/investors offering the products/mortgage programs to sell" and she is not "blaming the salesperson".
  • Paul H | | 30 Oct 2013, 09:37 AM Agree 0
    This is total Crap, Originators are on straight commissions and sell what is available to them. If the subprime mess was not created by Goverment they never would have been sold. Needless to say in Mass they have the highest cost to renew your license each year and now with the goverment involved and look for scap goats. Agreed there are some bad Originators out there but majority are good but now everyone suffers. Why dont they regulate, gas prices, electricians, plumbers etc I know when they come to my house one is 85, the other is 130 a hour etc. Gas is 349 on place, 329 another it is called free enterprise but to regulate the mortgage industry for programs these clowns put into place is just wrong. Now we have appraisals, reviews and all other things that guess who pays for it the customers!!! We all know 5% are bad mortgages and the other 80% customers knew exactly what they were doing but wnated to keep up with their neighbors and lost so instead of owning up jump on Govt handouts and cried fool to try and survive. I dont see where increase costs for others to profit from is better for customers.. A BIG JOKE
  • Steve V | | 30 Oct 2013, 09:43 AM Agree 0
    I am growing very tired hearing others point the finger at originators. WE did not create the programs. WE did not create, nor loosen the guidelines. WE did not underwrite (and thus verify) the file documentation anymore than necessary to submit a file to a LENDER. Finally, WE did not approve the borrowers.
    Due to a smaller lobby in DC originators have been run over roughshod by errant BANKERS on WALL STREET who bundled subprime with A paper. Then comes along the ratings agencies failure to properly rate theses bundled mortgages...that's what I believe created this meltdown. Have a nice day.
  • jak | | 30 Oct 2013, 09:51 AM Agree 0
    great!...the fox in charge of the coop is telling us all her almighty verdict.

    fedup, u seem just a mouthpiece for the feds who are a corrupt machine. please leave the private sector and rejoin ms. warren on her fake sanctimonious campaign trail.
  • Frank O | | 30 Oct 2013, 10:03 AM Agree 0
    Ms Warren, lets face it: Anytime the Fed gets involved it's a big problem. US Post office, FEMA, Obama Care, A place called Washington DC, just to name a few. You and Barney must be drinking the same Kool Aid up there in Mass.
  • OverRegulated | | 30 Oct 2013, 10:13 AM Agree 0
    Over regulation has its own set of problems that we have yet to completely unfold yet. I firmly believe that all of this could have been corrected by simply tightening UW and closing loop holes on the origination side. And by having full disclosure on the investment side.. the larger of the two problems being the investment side. This is where the big losses were. Cheryl is right on one note... the salesperson sold an available product! IF that product wasn't available or had tighter restrictions then the end result would be different! We can't be expected to predict or control the customers decisions actions or circumstances beyond the closing of a mortgage. Nor can we make a mortgage decision on the speculation of what a customer will do if they have a life altering event that might make them have to decide to quit making their home payments resulting in a foreclosure.
  • OverRegulated | | 30 Oct 2013, 10:16 AM Agree 0
    Well said Joe!!!
  • Pat Anderson | | 30 Oct 2013, 10:26 AM Agree 0
    No surprised to see another member of our government making excuses for the government's failing. It's a shame that there are plenty of voters out their as ignorant as she is that will fall for her line of garbage.
  • John C Durham | | 30 Oct 2013, 10:29 AM Agree 0
    Most of these remarks here show no understanding of the financial crisis whatever.

    The government didn't put out the $1.4Thousand Trillion in securities papers that has nothing of value at its heart. The TBTF banks, which controlled 95% of the housing mortgage money did.

    The government made mistakes only insofar as they went along with the thieves at the big banks...hello...
  • Rich | | 30 Oct 2013, 10:36 AM Agree 0
    Could the Senator please comment on her home flipping activities? Perhaps she learned some lessons evicting foreclosed owners from their former properties.
  • Pat Anderson | | 30 Oct 2013, 10:45 AM Agree 0
    Mr. John Durham,

    I think that you may be the one not aware of the cause of the financial crisis.

    FNMA's My Community program was allowing borrowers to purchase a home with only $100.00 out of pocket. I saw 500 credit scores with 60% debt ratios approved. This was all done according to FNMA guidelines. Banks were strong armed by the government to provide this affordable housing products and now Ms. Warren wants to blame them for the housing crisis.
  • John C Durham | | 30 Oct 2013, 11:16 AM Agree 0
    Pat Anderson. Money was made available by a certain class of investors who provided the money for interest rate mortgages not actually tied to the the prime rate. They were attracted by the big money they would make. Goldman, Chase et al, set up the deals and then bet that these mortgages would come apart, also being attracted by the big money they would make. Every cycle of increase in interest rate on those mortgages brought floods of defaults. The credit rating agencies were in on it...and oh, there is MERS, the plan to go completely around any government whatever, Robo signing, etc.

    When the foreclosures came the rot of the entire system of hot derivative securities (not actually supported by anything of real value) became clear and there are huge settlements from the banks to investors almost every week and hundreds of lawsuits are in the courts over the fact that almost all foreclosures were done on phony paper. The leading New York judge said a year ago, "We still haven't seen any original Notes" after throwing out 130 foreclosures at a time. The foreclosing banks had no right to foreclose and the investors were not getting any of the property, the paper, the payments or the insurance. The big banks were taking everything and Fannie, Freddie started telling courts they held the original notes (they didn't and don't) backing up the big banks.

    It isn't the government that can be blamed for any of it. But, it is certainly the lack of government. During the Savings and Loan fraud (small compared to this), Reagan put almost 1,000 bankers in jail and they deserved to be put there. Now, that's government. It is estimated that somewhere between 5 and 15 thousand people inside the Wall Street banks are criminally guilty of securities fraud. Don't blame loss of pensions, bank accounts, retirement account values, etc. on the government. I'm so tired of listening to no nothings enable The People's worst enemies take this country apart in a way that no Nazi or Bolshevik nation every was successful at doing. This love of money, the markets, big business, type of ideology has proven more destructive to America than the Communists and Nazis both put together against it.
  • John C Durham | | 30 Oct 2013, 11:20 AM Agree 0
    Cheyenne, WY -- (SBWIRE) -- 07/09/2012 -- Pinellas County residents Aida and Howard Hayes found themselves part of the nationwide foreclosure process when Deutsche Bank National Trust Company attempted to foreclosure on their home. The Hayes’ hired Kelley Boseker, a local foreclosure defense attorney, who used a securitization audit by Paladin Securitization Auditors of Cheyenne, WY, to show the lender did not have the right to foreclose on their property. The securitization audit unraveled a web of forged signatures, robo-signing, and foreclosure process fraud that ultimately won the case for the Hayes’.

    The securitization audit that was submitted as legal evidence found that the first mortgage of $134,400 was originally financed with First NLC Financial Service, LLC. However, the Hayes’ mortgage coupons oddly directed them to make their payments to OCWEN Loan Servicing, LLC in Carol Stream, Illinois. Next, the securitization audit found that the signature on the mortgage from Thomas Czochanski, the Vice President and CFO of First NLC Financial Service, LLC resembled that of an employee from LSI, a well known robo-signing company. The auditor located the public records for Czochanski’s personal mortgage and found that the signatures didn’t remotely resemble each other. The securitization auditor concluded that: “the endorsement on the Note is not genuine, and that it was most likely fabricated by Lender Processing Services, who is routinely hired by Shapiro and Fishman to produce these documents. This Note would legally still be owned by First NLC Financial Services, LLC and is in the midst of a Chapter 11 Bankruptcy as case 9:08-Bk-10632.”

    Other major issues noted in the securitization audit were that the Assignment of Mortgage was provided but had an “Unofficial Copy” watermark on it and was never recorded. Additionally, Shapiro & Fishman, the legal firm foreclosing on the property for the lender, prepared the Assignment of Mortgage and sent it for signature to two employees of Lender Processing Systems, Inc. who claimed to be Vice Presidents of Mortgage Electronic Registration Systems, Inc. (MERS) who is the original Mortgagee designated on the Mortgage instrument. The authority of these two individuals to execute this document was challenged, as the company they work for is not any financial institution that has had a valid interest in this mortgage or any financial institution claiming interest in the mortgage and no documentation could be produced by MERS to this end. In other words, they had no right to sign the mortgage.

    The judge for the foreclosure defense case has ruled in favor of Aida and Howard Hayes and supported the claim that the bank had no right to foreclose on their home. What’s even more exciting is that the Hayes’ no longer have make payments on their first mortgage since it was shown that the bank does not own their mortgage.

    We’ll chalk this one up as a victory not only for the attorney Kelley Boseker and the homeowners Aida and Howard Hayes, but for the American People who just witnessed that there is hope for this nationwide crisis.

    For reference, the Case Docket Number is 522008CA013676XXCICI.
  • Michael | | 30 Oct 2013, 11:24 AM Agree 0
    Okay! It seems that most of those commenting here know what REALLY happened. The Feds forced these mortgages on the industry. I don't need to go into all the details, we know them all too well.

    Now here is the BIG question! Why are all of you NOT doing anything about it?! Why are you just complaining?!

    Now for the BIGGER question! WHY AREN'T ALL OF US IN THIS INDUSTRY COMING DOWN ON WASHINGTON DC AND THE FEDS IN MASS?!!! Why aren't we DEMANDING the truth be heard. Why aren't we camped on the doorsteps of the Senate and Congress?

    REMEMBER... this is suppose to be a government of the people, by the people, and FOR THE PEOPLE.

    Why are we just rolling over and allowing the DICTATORS in DC to force this crap on us?

    I hate to remind you of this but....Evil ONLY exists where good men do NOTHING!

    Get the truth out! Tell the public the truth. Talk to newspapers, radio stations, civic groups, etc. They have no clue as to what DC is doing to the housing industry.

    The CFPB is a 100% autonomous dictatorship unaccountable to no one. By law they can do whatever THEY want, regardless of what we the people want.

    The president, the Senate and Congress, are all filled with people who believe that we the people are sheep who won't stand up to them. They are a bunch of princes and princesses, lead by one who thinks he is a king, living high off of Americans with an entitlement mentality.

    LAST POINT... If we don't ALL get angry as Hell and get actively involved NOW... we will be getting EXACTLY what we deserve.

    Oh, one more point... I hope that this forum will take all these comments and send them to the powers to be, and let them know that we will NO LONGER sit idly by and allow this to happen.
  • Roger Hinchcliff | | 30 Oct 2013, 11:55 AM Agree 0
    OMG! I read some of these comments and I'm in shock! Boy some of you have drank the Kool-Aid for sure.

    Two words for you Glass–Steagall Act! Look it up and inform yourself instead of blaming originators for the melt down. How about starting with Bill Clinton!

    Lets not forget the socialist country were turning into before our very eyes! Everybody jumped on the band wagon during the crisis.

    Oh my house is not worth what it once was so I'm going to give it back! I know that was the originators fault, right? Give me a break!

    Mortgage originators are not to blame for this crisis. And if you believe that then your ignorant and un-informed! Glass Steagall is a fact not fiction! The 558 people in Washington that run this country for the 300 million plus were asleep at the wheel.

    Greed will get Wall street every time. The first depression proved that. Was that a mortgage originators fault back then too?

    Wake up people and stop drinking the Kool Aid!

    Regards
  • Paulsmoney@gmail.com | | 30 Oct 2013, 12:12 PM Agree 0
    Michael puts this forum and article that generated these comments into perspective. What are you (we) doing to bring forward the truth? What are we doing to try and head off further legalized lunacy in lending?

    Has everyone joined NAMB? How's about Common Cause? Have any brave souls broached this subject with the other benefactors of these mortgage programs; THE REALTORS?

    See the ol' divide and conquer strategy is at work, put forth by the banks. If the banks can drive a wedge between Realtors and 'alternative lending sources' they win yet again!

    Let's see some activism. I'm mad as Hell and I'm retired from the mortgage business...
  • John Burns | | 30 Oct 2013, 12:24 PM Agree 0
    Elizabeth Warren has no idea what she is talking about. I have been in the mortgage business for 42 years and experienced first hand the demolition of FNMA and FHLMC by our Federal Government. Most responsible are Bill Clinton and Barney Frank and Chris Dodd. Read U.S. House of Representatives Committee on Oversite and Government Reform-The Role of Government Affordable Housing Policy in Creating the Global Financial Crisis of 2008. Follow that reading with TJ Hancock-Housing Bubble Financial Crisis-What Happened, Who is Responsible. Then please broadcast that to the general public, like this Warren propaganda about originators.
  • Cheryl M | | 30 Oct 2013, 12:54 PM Agree 0
    John C Durham, thank you! There are so few lawsuits on this out there. I've helped many through arbritration on this successfully. Many gave up and I am still waiting on response from Ms. Warren from 2008 as Chair of the Congressional Oversight Committee/ That letter mostly referenced Wells and similar actions; as your comments did CHase. Ms Warren is one who "overlooked" TARP. She should have been more interested in meeting those of us fighting for Mr. and Mrs. Hayes. Her problem is she's more about advancing her political career than sticking to one thing and seeing results. Glad to see you achieve results for your clients. Hope that docket number gets around, many attorneys won't take cases like this due to the gov't agreements were with the "banks" not the consumer. So much for that oath..."for the people." Bill Clinton didn't make those agreements GWBush helped with that.
  • Elizabeth “You didn’t build that” Warren | | 30 Oct 2013, 02:35 PM Agree 0
    says the 'fairly clear' problem is "As for Fannie and Freddie, they…and everybody knew the government would step in to bail them out if things did not" (go well).
    Then she says;
    "The housing market is so large and so important to the American people that there is no plausible scenario where there isn't a government guarantee." "An explicit guarantee will provide the assurance the market needs to make sure that 30-year fixed rate mortgages remain widely available, and that's crucial."

    She is promoting the same thing she claims was the problem. She doesn’t even agree with what she herself says.

    If this was the problem why is she blaming originators?
  • Michael | | 30 Oct 2013, 03:35 PM Agree 0
    Wait a minute Mr. John C. Durham...... You call it "a victory that Mr. & Mrs. Hayes no longer have to make payments on their first mortgage"! This is the ENTITLEMENT mentality that was the second main factor in the real estate melt-down.

    Mr. & Mrs. Hayes BORROWED the money with a promise to PAY IT BACK! THEY OWE THE MONEY pure and simple! They may not owe it to the bank trying to collect but they owe it to someone and that paper trail can be traced.

    This country with its liberal attorneys who will sell their souls to the devil for a buck, and the judges (who by the way are attorneys also) are training the people of this country to whatever they can to get out of paying their legitimate debts. The entire mortgage modification scam was a fraud made worse by those greedy attorneys.

    Now I am not disagreeing that Mr. & Mrs Hayes had a legitimate claim against the servicer as they were paying their mortgage payments to who they believed the money was due. But to say they won a victory by no longer having to pay their mortgage back is wrong. Now we the people of this country must pay it for them. Now that is really fair isn't it?
  • John C Durham | | 30 Oct 2013, 03:36 PM Agree 0
    Roger Hinchcliff, I don't agree with anything you have said EXCEPT: GLASS-STEAGALL. There is no doubt in the minds of every independent economic thinker on Earth that the restoration of that law is essential to restore prosperity. Dean Baker, James Galbraith, William K Black and on and on all say this. Likewise, David Stockman, is calling for an even stiffer law he calls, "Super Glass-Steagall". Left or Right, all are in agreement and there is a fight to the death going on in Congress between the insolvent TBTF banks and many Senators and Representatives to bring it back.

    Letting the private institutions create all of the U. S. money supply and then ON TOP OF THAT, let them take the money and gamble with it is insane. Glass especially was interested in stopping that and was later joined by Steagall and FDR when he came in office. The bill gave trading houses one year to decide WHICH they wanted to be: Commercial Banks OR Trading Houses.

    Economics isn't about money, it is about what securities come into being when it is spent. Gold, Silver, Roads, Dams, Docks, Houses, energy, machinery, transportation systems, education, research, health care, ANYTHING that helps human beings reach their highest productive potential BACKS paper money.

    Several of you should be ashamed of your ignorance and lack of appreciation of Elisabeth Warren, a woman who has put her life on the line in her battles. Your catch all ignorant phrase: "Socialist" shows just how little you understand the nature of a Democratic Constitutional Republic. If I thought most Americans were as stupid as some on this blog, I would have never encouraged Elizabeth Warren to run for the Senate when I met with her years ago. I know her. I contributed to her campaign.

    Lest you believe I'm a Democrat, I will point out that I worked the in the first election campaign of Governor Otter of Idaho, an enemy of the so called "Patriot Act" but who is otherwise a disappointment. The Republican & Democratic parties are owned by big oil, big banking, big corporations and the war machine and I favor Independents or those who have little or no regard for the party system if they do run under one or the other banner.

    You people don't know who our heroes are and you have NO APPRECIATION when a Franklin, a Hamilton, a Washington, a Q. Adams or Clay, Crockett, Lincoln, Garfield, FDR, Eisenhower and Kennedy puts their life on the line for you. I'm embarrassed for you and ashamed to associate with you.
  • John C Durham | | 30 Oct 2013, 03:53 PM Agree 0
    Michael,

    How little you are concerned that TBTF banks have stolen millions of home that they don't own or have any interest whatever. Million. But, it's okay if they steal but not okay when an honest citizen tries to keep their home which they have made down payment on and monthly payments for. How stupid is that?

    You would rather let the investors AND the owners get screwed out their home by criminal bankers wouldn't you? Would you?

    BofA tried to foreclose on my house illegally. I was making my payments as agreed and here they came. If I was as dumb as you, I would have just laid down. But, they had no right even to my payments I was making to them and at the end of my case, which I handled myself, I refused to pay them anything further unless they would indemnify me and the future purchaser.

    They gave me such indemnification, they cleared up our credit reports, they erased all charges and fees and gave me a new mortgage at low interest and a check for several thousand dollars.

    At the beginning of the suit, they pointed out that I was in the wrong court. I knew that, but suing them in any court was the only way I could connect to their legal department. I said that if they wanted to move it that was fine with me and would save me about bunches in legal fees.

    I told them if they did that I would move to for a clear title because they didn't have the original note or any real interest in the property and were, like the millions of other cases, just trying to steal my house because most people just lay down for it and don't go into court and don't know what to do if they did. A clear title lawsuit notifies everyone who might have an "interest" (money) in a property or home. They have to PROVE that they have an interest. I told the New York attorneys for BofA that I had already done a real audit of the securities having to do with my house and I knew that they couldn't come up with the paperwork and I would bring in experts to demonstrate that all their paperwork was fraudulent.

    They settled out of court.

    By the way...I did this in Small Claims Court, Glens Falls, NY!
  • John C Durham | | 30 Oct 2013, 04:01 PM Agree 0
    This is the company to contact for an audit that you need these days to go for clear title.

    http://securitizationauditservices.com/securitization-audit-discount-offers/

    Know that payment will still be made but to the court until the case is settled. Also, if at any future time someone can come forward and ask for payment if they can prove the payments were owed to them. Down the road, when you think you have paid for your house, you may find out that you should have been paying someone else. It's only fair that the court collect the money for investors who may take 20 years to put everything together and come after your house.

    Millions of titles down at thousands of Land Offices, are clouded and I'm amazed that refinancing even goes on while everyone pretends that they can just sell houses when 97% have clouded titles.

    Oh, well.
  • Michael | | 30 Oct 2013, 05:17 PM Agree 0
    John C. Durham....

    First sir...this country is NOT a Democratic Constitutional Republic. You show your ignorance... this country is REPRESENTATIVE CONSTITUTIONAL REPUBLIC.

    You owe all those whom you have call names and said you are ashamed of an APOLOGY.

    Unfortunately you sir are just like all the other educated idiots in this country that think they know more and are better than the rest of us. Reading your comments so far show that you are driven by your emotionally directed principles rather than educated logic.

    I did not, nor did anyone else on this forum, state that we were in favor of the TBTF Banks and Wall Street as you so incorrectly stated. What was said was that those who borrowed the money OWE it back. No one said that the TBTF Banks didn't incorrectly try to foreclose on anyone. No one said that it is not okay for a homeowner to fight for legal ownership of his home. Or any of the other false claims you are making about those who have spoken up here.

    I suggest that you get off of your emotional roll-a-coaster, calm down, and separate fact from fiction BEFORE you attack.

    Other than that... thank you all for the stimulating and invigorating conversation.
  • Kenneth | | 31 Oct 2013, 07:34 AM Agree 0
    Where is the blame for all the realtors with their first time home buyer scaminars? Their marketing was aimed at people who didn't know they could buy a home.

    They told marginal credit clients (and pulled their credit for them) that they could indeed afford and purchase a home. And they made a 3-6% commission on the sale.
    The marginal clients were paraded past every mortgage officer until they found one who could do the mortgage.
    Freddie and Fannie loosened up their guidelines after the sub-prime boom started to capture their piece of the pie.
    Idiot Warren, you have no clue what you are talking about.
  • John C Durham | | 31 Oct 2013, 11:57 AM Agree 0
    For Michael,

    The nation has been differently by many. Most of the time we hear our Nation defined as "Our Democracy". Some prefer to over emphasizing our historically shady Representative part. Historically, the Judicial branch is the most successful Branch and that is by some great distance.

    Primarily, we are a Republic.

    Secondly, we are a Constitutional Republic.

    Thirdly, we are a Democratic Constitutional Republic.

    We are, and I would say FOURTHLY or Fifthly or Sixthly, a Federal (Judicial, Executive, Legislative) Democratic Constitutional Republic. I don't view your take on what I said as exactly correct. This is based on my study of 2,300 years of "Western" political economics. Our REPRESENTATIVE part is I believe and I agree with some who have also said as much.

    However, to carry on further, the legislative branch is divided into the Senate and REPRESENTATIVE House.

    The House of Representatives is closer to what the Founders may have privately referred to as "The Mob". But, that is why it is Democratically elected most OFTEN and numerically DIVIDED most. It would be an understatement to say that the founders viewed REPRESENTATIVES as "most dangerous" (see Constitutional Debates, esp. Virginia's Representatives) to our Republic. The Judicial Branch is not Democratically elected, because the founders (again, see Constitutional Debates, esp. Virginia, NY, Delaware Representatives) viewed the Judicial had to be the Branch most protected from the REPRESENTATIVES and used that more fundamental Democratic feature against "The Mob".

    In Summary:

    BOTH Executive and Legislators are Democratically elected, so Democratic supersedes "Representative" by some distance.
  • John C Durham | | 31 Oct 2013, 12:23 PM Agree 0
    For Michael,

    Not, about the other issues. Whitman pointed out to a friend in a letter that "The Truth, is the inclusion of the Proper Proportion of Facts".

    If, after several million entries attacking the TBTF banks, you chose to attack those who have ended up, at least temporarily, with a partially paid for house, you have given us the Truth.

    Elizabeth Warren is on of the three recent government employees who have put their lives on the line against the TBTF banks. The other two are also women.

    The other two are also considering a run for office and I encourage them to do so, despite the most of the ilk represented on in this particular blog issue.

    Certainly, they will be as quickly attacked for trying to put the government to work to try to put our greatest criminals of this moment in jail by the haters of all forms of government action, except that which frees up other of our greatest criminals to do whatever they want, while we bend over backward to imprison other Americans who are probably doing nothing more criminal that people just like us.
  • Lee in CA | | 31 Oct 2013, 12:29 PM Agree 0
    Joe, if you were a car salesman, then it would be like blaming you for selling a piece of crap car that you know has serious problems... and you don't disclose those problems... and then complaining about why as a used car salesman you have a bad reputation.
  • Lee in CA | | 31 Oct 2013, 12:35 PM Agree 0
    This constant whining about "if they didn't offer bad products then I wouldn't have sold bad products" is a load of crap. The same quality products that are available today were available then. Was it the competitive environment that forced you to sell those "bad" products... maybe. But, the whole concept of "don't give me something to sell that is not good" is simply a refusal to accept responsibility for caring more about your income than your borrowers well being. I am an originator and I suffered from competition that was always too ready to "screw" the borrower with some ridiculous mortgage product. I may not have gotten rich like a lot of originators, but I never harmed any of my clients nor did I allow them to get involved in a mortgage product that was potentially harmful. It galls me to listen to listen to other originators "whine" about it being someone else fault.
  • Wm Matz | | 31 Oct 2013, 12:49 PM Agree 0
    People, wake up! As long as originators are "just salesmen", as so many here claim, originators will continue to suffer an overall low reputation. Get educated so that you are a true financial advisors and can work collaboratively with the others.

    Attys, CPA's, CFP's, CLU's, etc only know enough about mortgages to be dangerous. Learn enough about taxes, investments, insurance, etc to be able to talk intelligently to them about their issues, and you will be a valuable member of the team. However, if you want to be "just salesmen", with no responsibility for the product, go sell something that cannot hurt anyone instead of the most important financial product in most Americans' lives.
  • Michael | | 31 Oct 2013, 02:12 PM Agree 0
    You know who this is address to my friend...
    As I stated before "this country is run by educated liberal idiots",with no real world experience, and in most cases have never ran a business in their life. Your comment about these women "putting their lives on the line" is a bunch of crap.

    As for attacking those who ended up with a partially paid for house.... you are exactly right. What give those who have not made their payments for in some cases over 2 years the right to have their debt obligation, which no one forced them into, reduced or forgiven? Not to mention the years of living in the home free of charge. While the responsible owners continued to make their payments on their underwater homes.

    I have been in this business for 27 years. I involved in the mortgage modification side of it also. I saw first hand how the entitlement society you so dearly love abused and took advantage of the rest of us tax payers.

    As far as you study of "2,300 years of "Western" political economics", unless I am mistaken the United States isn't that old yet. So you can't judge the U.S. by what the rest of the world has done.

    And your comments in a vain and failed attempt to support your "Democratic Constitutional Republic" argument ... well they don't hold water either. You would have made a great used car salesman, attorney, or even better yet a politician. Full of hot air.

    The only thing I will agree with you is... Yes the TBTF banks and those on Wall Street who were involved in this economic melt-down should be and hopefully will be punished. Unfortunately your Democratic Liberal Crooked friends in the Senate and the House are owned lock stock and barrel by those crooks and all they care about is getting re-elected! And they have learned first hand that by giving the 99% entitlement mentality idiots everything they want, at the expense of those of us with morals, ethics and a sense of responsibility, even if it means the destruction of the country our forefathers founded, they will continue to be re-elected.

    Now...I am done having these conversations. Especially with someone who operates and is motivated by emotion and not common sense or logic. Logic, facts, knowledge and common sense...unfortunately...will never prevail over emotion. It's a total waste of time.
  • John C Durham | | 31 Oct 2013, 03:48 PM Agree 0
    Michael,

    America was the culmination of efforts began in Greece. Ever notice the style in our monuments? Of course not.

    Follow the founders of Athens through the efforts of Alexander, the efforts of the early Roman Republicans, Florence, Frances I of France and his German, Russian, English counterparts-Henry 7th, Elizabeth 1st...any of these ring a bell to you? Oh of course not. They were all...what were they...Cromwell, Colbert...and then the Socialist Franklin, Washington, Hamilton, Madison, Jay, Q. Adams, Clay, Crockett, Lincoln, Garfield, Teddy, FDR, Eisenhower & Kennedy...where the history of the Republic for practical considerations...and the decline begins under financial puppets, Nixon, (not Ford), Carter, Reagan, Bush, Clinton, Bush, Obama...and here we are now.

    You are so behind "the curve" of events and the history out of which it grew and spread. Our country was the first real Republic. Our government, not the banks, printed our money. Mexico, under the ally of Lincoln, the only full blooded indigenous national (Zapotec Indian), Benito Juarez, was next with even a better Constitution than our and which survived until its last great President, Jose Lopez Portillo...a recent President who you will no doubt, out of ignorance, waste no time smearing as you do others who put their life on the line for The People.

    You know nothing of how the Russian Transcontinental Railway was built or the German Rail Network was installed and expanded to Persia during Lincoln's time fighting The War. The Baldwin Locomotives and technology, financed and shipped out from American to those Nations are trivial elements, not to be thought about, yet, Lincoln single handedly, deliberately, successfully ended the British Empire.

    Nor, the debt of the American Slavers to British Banks, who were determined to enter the War but were turned back by the largest fleet in the World. Not ours. Guess whose? Ever wonder about all those "foreign" Naval Officers pictured with Lincoln? Guess. Try...

    But, of course you know enough already, like those who would shut down the Country to get their way...who also don't believe in Democratic processes but, like you worship the forces of The Market...and the invisible hand (of the 1%) which controls it now and controlled it clear back to Persian times. Olympias, who kept her Son from being a stooge for Persian financial interests, like her Husband. Olympias, a student of Plato...See?
  • Michael | | 31 Oct 2013, 06:31 PM Agree 0
    My friend your insults fail again. Not only do I know about and studied all that you mention, I have had the fortunate experience to have lived in and been to many of those countries. I too am a student of history.

    What you have failed to learn is that socialism has failed in every country and nation where it has been tried. The people become dependent on the government to take care of them from cradle to grave.

    The United States, the greatest country in the world despite its mistakes and some corrupt leaders, and capitalism, has done more and provided more for the citizens of the world than any other country in existence. Not my opinion but historical fact. Give a man a fish and you have fed him for a day. Teach a man to fish and you have fed him for a life time.

    Unfortunately the current administration and the liberals in our federal and state governments are destroying this once great nation. They have made us a mockery. Our friends no longer trust us and our enemies no longer fear us.

    Unless the principles of conservatism and common sense take hold of this country again, it is doomed to failure. And it may already be to late. Those who fail to learn the lessons of history are doomed to repeat them.

    you bash the 1%, which is really more like 50%. The movers and shakers. Those who seek excellence and not mediocrity.

    Do you know what the difference is between a poor man and a rich man? (and you can define rich in any way you wish; $100K, $250K, Millions)

    The rich man is willing to make the sacrifices and do what the poor man won't.

    Instead of belittling the rich, you should be thankful for them. For they in one way or another take care of and feed those who can't or won't for themselves.

    Again I tire of this bantering and wish you the best my friend. And I sincerely mean that.
  • fedup | | 31 Oct 2013, 07:42 PM Agree 0
    Michael, while I appreciate your way of seeing your truth, I don't agree that the rich seek to take care of anyone but themselves, at the expense of those who can least afford it. Its taking advantage of people...exploiting them. So whether your opinion is your "fact" or not, is just that....your opinion. And I wish you well.
  • Michael | | 31 Oct 2013, 09:15 PM Agree 0
    Fedup...I agree with you. I don't agree that the rich seek to take care of anyone but themselves either. Quite the opposite. I too agree that no one should take advantage of anyone else or exploit them. Unfortunately there are all to many in this country and the world who are doing just that. And many of them are holding positions in our government. Making dependent sheep of the masses who are foolish enough to let them. Truth unfortunately is in the eyes of the beholder. And if the beholder us foolishly unaware of what is happening around them... Well... then their truth is only a fantasy. For you see the real truth about truth, is that honest truth is the only truth. Everything else is just a mirage. We cannot change truth we can only distort it.

    And you are correct about opinions. Everyone has at least one, and as the saying goes some don't smell so good.

    Hopefully ones opinions are comprised of truth and fact and not based on ones emotions and ideology.
  • John C Durham | | 01 Nov 2013, 12:51 AM Agree 0
    Michael,


    You are misinformed or believe you must stand between something that is actually a mystery to you and others who actually don't exist in order to protect that which has destroyed much of the Earth and its People. So...

    No more Pearls for you...
  • Michael | | 01 Nov 2013, 09:12 AM Agree 0
    How interesting it is that this original discussion about the melt-down of the real estate and the mortgage industry, has become an attack against ones beliefs about the state of the world and who is to blame for it. Ones pampas and pious attitudes disguised in the form of educated bliss, demeaning all who do not agree. As I have stated before...when one is invested emotionally into an argument... logic and truth will never win.

    Now for the sake of all...let's move onto something else... and have an enjoyable weekend. Please.
  • John C Durham | | 01 Nov 2013, 09:16 AM Agree 0
    FEDUP,

    I find government influenced by big banks, big corporations and the war machine. By blaming the government and not those who have bought our government at wholesale prices, it builds their power, don't you think?
  • Ted Harris | | 01 Nov 2013, 12:21 PM Agree 0
    I agree that the mortgage market melt-down can be blamed on all three. I have originated mortgage mortgages for 38 + years. I believe that the main cause of the problem was greed. Loan originators, and investors.
    The mortgage originators were out to make as much money as they possibly could and not caring about whether the prospective borrower could make the payments or not and thus the liar mortgage was created.
    The investor (wall street) in this case could see all of the profits it was going to make and again didn't worry about the borrower. Thus by securitizing the liar mortgages along with the other mortgage types, such as the no interest mortgage, the option arm and others they were making a fat profit.
    Enter the defaulted mortgages because the borrower could not make payments and the lenders with mortgages closed that they could not sell any longer and not having the capital to keep those mortgages and poof the market crashed.
    Hind sight is always 20/20 isn't it? So with the 20/20 hind sight that we have the advantage to look back on now what have we learned?

    We are looking at a qualified mortgage with max debt to income ration of 43%. Wow, that is going to kill us, not. For many years the market got along with ratio's of 29/36 and surprise people still were able to qualify for mortgages.
    Before the entrance of credit scores we had to provide evidence that the borrower was able to make the payments. If there were credit issues we had to determine the reason for the credit problem and then show what had changed so that would not be a problem in the future.
    I don't have solid evidence of the default rate but it was low, yes there were defaults because someone may have lost a job or some other factor but the default rate was lower than current default rates.
    There were other issues that hurt the market such as interest rates at 18%, recessions, slowing economy, but we still continued to originate home mortgages.
    We just need to be patient and let the market take care of its self. It always has and it always will, as long as he free enterprise system is alive and well.
  • David A | | 04 Nov 2013, 11:38 AM Agree 0
    At one time there was a rythym to the housing industry and the housing finance industry. Every year was not a banner year in home sales, or in mortgage origination. If you ran a mortgage company, or owed one, both of which I did, you understood that you had ebbs and flows in your volume, your margins and your profits. You planned on that. You kept staff tight. You watched your debt, (other than your warehouse debt) and you let your staff know that these things were part of the industry they were involved with.

    In the early years of the new milennia, after we did our government dance for Y2K, and most of us lost money, we were rewarded with banner origination years in 2001-2004.

    Banks looked at the volume going on in 2001, and decided to get involved. Every body, (on a rising tide that floated all boats) prospered through that era. A gush of cheap money, in terms of warehouse rates and long term rates guaranteed record closed volume and record bottom lines.

    We knew that nothing particularly in the housing business, is forever. In Monmouth County, New Jersey, property values nearly doubled in four years. The same occurred in pockets all over the country. There had to be a correction, a contraction. The cyclical nature of the businesses, both housing and housing finance, dictated that market adjustments would take place.

    Except, they didn't. Banks and quasi-federal institutions are publicly traded entities. The banks that got involved in the frothy days of 2001-2002 had stock prices to support. Volumes were not supposed to go down; earnings were never allowed to regress, stock prices had to go up, by any means necessary.

    JP Morgan Chase, proud parent first to Chase B,C,D, (during the 90s) then the Chase second mortgage and HELOC platforms, didn't restrict borrowers in 2004-2006. Instead, it lowered its standards, raised its LTVs and ratios and kept its volume constant.

    Wells Fargo kept its sub-prime moving along with 95% Stated/Stated at 590 Fico levels. B of A helped motel owners everywhere by approving condo conversions of resort area motels for 90% LTVs on 350 square foot "second homes". Wachovia fell in love with Option Arms and bought the farm with its purchase of the COFI king. Citi, the arrogant dictator of the mid-west, had high standards in the suburbs of St. Louis, buta finance company mentality on the Main Streets of America. It's little store fronts in shopping centers across the land lent money at double digit rates to homeowners in need of a little assistance, as long as the mortgage was secured by a second or third lien on real estate. As we know, the list goes on and on.

    Where was Ms. Warren and her court when the jesters ran sub-prime? I know she was not in office at the time. I do know that Barney Frank and Senator Dodd were on the payroll for the whole run-up.

    I think I agree that the loose standards applied to minority housing initiatives did not sink the country into recession. The usual political blunders, (FHA 1 yr ARM rates with 50% delinquency rates from the 1990s come to mind) couldn't sink us. Those blunders, (teacher next door, cop next door, 203K for investors) harmed HUD, but didn't sully the capes of the kings and queens of the industry, FNMA and FHLMC.

    No, it wasn't housing initiatives that sunk us. It wasn't the small brokers and mortgage bankers of America that led the way to perdition. It was the SEC regulated boys and girls that brought this to a head. Those entities can't take a neutral year, much less a down year. Every thing has to rise, earnings have to increase, P/E ratio need to climb, or the whole shell game comes to an end. The OCC, SEC, FDIC and the rest of the alphabet soup put out there to regulate these institutions is an expensive joke on the American taxpayer.

    The Main Street Broker and Banker didn't cause this to happen. Nor did the L.O. who was selling the car built in Arlington or D.C. or Missouri. None of these small players had the volume or the juice to bring it all down. Countrywide was regulated by the SEC. They owned a bank that was regulated by the OCC, and examined by the FDIC. Problems there boys? Nope, not a one.

    FNMA hasn't yet filed an acceptable audited statement for fiscal 2003. They had the Congress mandated FHFA as their overseer. Problems in the District there FHFA? Nope, not a one.

    Tell me now, once again, are FNMA and FHLMC still here? Yep. How about our friends at B of A and Wells and Citi; what of our friends at Chase? Top five banks in America you say? That's great. And all those mortgage folk that work for those banks, do they have to take the Safe Act courses, and pass the state and Federal tests? Nope, you say? Continuing education on bank related issues is all they need to do? That makes sense.

    Any Senator or Representative, any Fed Governor or SEC manager should begin every speech that they make before a trade organization by saying, "I'm sorry, I let you down," or "We are sorry, we all let you down," because you did.

    You all in Washington D.C. had the Federal power to regulate, oversee, contain, control. And you didn't do your job. Dodd-Frank? On the job when all this fell to dross? Shame on you both.

    Today's solution is to regulate, control and contain the hosuing professionals and the housing finance professionals. Our replacements are the current employees of the largest banks in the country. The winners here are clearly, even with the multi-billion dollar fines levied, the perpetrator banks. Those banks control market share and pricing and ironically, access, to the housing industry in this country. The Honorable Senator Warren seems to think this shift of market share and control, from small Main Street businesses to the kings of Wall Street to be a good step. I would respectfully disagree.

    David A.

  • Lee in CA | | 04 Nov 2013, 12:59 PM Agree 0
    Ted, that is the kind of wisdom and perspective that this industry needs a massive infusion of...
  • R.Nolan | | 04 Nov 2013, 02:21 PM Agree 0
    What a joke. Maybe the good Senator and her friends on the hill could stop spending their time making these types of statements and do some real work. What a shame people like her get easy headlines to shift attention away from their own poor work.
  • LoanArranger | | 08 Nov 2013, 08:23 AM Agree 0
    What do you expect. She is an academic from Harvard who has years of mortgage origination experience. Her and commenters like Fedup are why it is imperative (think current FHA) the USG agencies have former "in the trench" originators either working for them or on a panel to "give it to em straight". Just like Joe in MN said we "did not hold a gun" to anyone's head.
    The drug manufacturers (wall street) after being legally sanctioned by the USG vis a vie raising the leverage ratio came up with the products for us to peddle. We did not make the drugs.
    Had the FHA kept up with market the Great Mortgage Debacle and Great Recession would not have occurred.
    Other than the sanctioned fraud product called the "Stated Wage Earner" the others [for the most part] had their place in the origination pipeline.
    And even when the bubble burst had the USG slowly turned down the "spicket" by eliminating such products and modifying others such as eliminating "unlimited" non owner occupied mortgages and/or revert back to higher down payments for them, fully qualify etc. the market collapse would not have occurred and the ensuing economic tsunami would have been greatly diminished.
    EVERYTHING starts with the USG and ends with the USG.
    As to the banks. If you are "too big to fail" then you're too big period. BOA should have been taken over by the USG and then broken up into small local banks again. But that is a whole nother story for another time.
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