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Toll Brothers calls new mortgage standards dumb

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Mortgage Professional America | 24 Oct 2014, 12:34 PM Agree 0
While other home builders praise the new standards, the founder of Toll Brothers says it’s “a really dumb ass idea.”
  • Griff | | 24 Oct 2014, 01:28 PM Agree 0
    I agree with him. While we are capping income at 3% for brokers that has to include some title fees as well as lender fees, and while we are jacking up the cost of appraisals by blindly ordering them thru inept AMC's, we lower credit scores and down payment requirements. Most likely these will result in more foreclosures. But I'm sure they'll find a way to blame brokers.
  • Cheryl M | | 24 Oct 2014, 01:55 PM Agree 0
    Mr. Toll, think of it like this, if want to pay off your mortgage in 15 years but you have a 30 yrs mortgage presently, and don't want to incur refi fees, etc. run an amoritization for a 15 year payment and pay that amount each month to the bank. But, if you get yourself into a "life" event and can no longer pay that 15 year amount anymore, go back to paying your lender the 30 yr amount you already have in place. No harm, right? Mr. Toll you keep on requiring 5 percent down and work with those 1% customers of the population that can afford your homes, keep your "really dumb ass" comment to yourself and leave the rest of us hard working diversified Americans with standards alone.
  • All FHA buyers | | 24 Oct 2014, 01:59 PM Agree 0
    Lets ask Mr Troll how many FHA buyers have bought his properties over the years with just 3.5% down financing? Is that crickets I hear in the background?
  • Lore | | 24 Oct 2014, 02:09 PM Agree 0
    I agree with Cheryl M. Mr. Toll you are excluding an entire customer population including first time home buyers. We need better access to credit for first-time homebuyers and others who deserve credit. Lending at 97% LTV was not the only reason our industry failed. We were under regulated and lending to borrowers with no documentation.

    Read David Stevens speech.
    http://www.mbaa.org/NewsandMedia/PressCenter/89704.htm
  • IMHO | | 24 Oct 2014, 02:12 PM Agree 0
    And Mrs. Troll, you forgot about the big bucks made on top of those mortgages from the highly incentivised CDO's (Collateral Debt Obligations) and the infamous YSP's (Yield Spread Premiums) the financiers made off from those subprime mortgages that GWB pushed in 2002. Blame the little guys...ya gotta love the 1%
  • RalbTalg the Pirate | | 24 Oct 2014, 02:19 PM Agree 0
    inept isnt a strong enough word for these AMC's and appraisers. Howabout radically incompetent.

    I dont think a 2% change in downpayment will hurt. VA (and I think USDA) is doing purchase money with 0% down right now. Lets see those performance numbers. If investors are too upset, what about a FICO score limitation overlay from your bank investors? 680 and below still bring 5%, 680 and above can bring 3%. The ATR analysis with employment history and DTI are more important than just how much is brought to closing for a down payment. We didnt have those thresholds and check-points in 2006-07. Remember the "exception pen"? Every bank manager had one...

    These aren't Ninja mortgages...

    No
    Income
    No
    Job
    Approved!
  • GLF Mortgage | | 24 Oct 2014, 02:47 PM Agree 0
    I have thirty years in the mortgage business and agree with Mr. Toll that we do not need to bring back programs that got us in this financial mess in the first place.However, I also agree with the comment on FHA and what's the difference between 3% and 3.5% down payment that is allowed on FHA mortgages? Besides the arm and the leg that Buyer's pay for mortgage insurance as a result of the low down payment FHA mortgage!
    The most important item we should take away from the financial crisis of 2007 and 2008 is that home ownership is not an entitlement!
    Not everyone is capable of owning a home. Home ownership is an earned privilege for responsible people who have a job,and pays their bills on time! The real problem is with the down payment and America's ability to save. Let's face it, Americans have a savings problem! Our country's economy is based on consumption and most individuals spend as much or more than they earn! And when they do save, I find the majority of their savings is in some kind of retirement fund. That is the crux of the problem and no one seems to address it!
    Why not find away for people to withdraw a percentage of more than half from their retirement savings without being taxed as long as they are buying a house. Basically they are transferring funds from one investment to another! It would promote more buying with limited risk.
    Lastly, I just need to say for those Mortgage Brokers who are complaining that they can only make up to 3% in points, you are all PIGS!!!

  • Alligator | | 24 Oct 2014, 02:59 PM Agree 0
    To GLF mortgage -If you have been in the mortgage business for 30 years then I would expect you to be smarter than your last sentence. Maybe you live in an area with high sales prices, but where I am at half of our mortgages are for under $100,000 and 90% under $200,000. 2.75% (Can't make 3) of $70,000 is $1925. Not a lot of money considering all of the time and work involved these days. Most all buyers have issues to get around; even your 700 score buyers have cash deposits or multiple student mortgages in deferment.
  • Wm Matz | | 24 Oct 2014, 06:48 PM Agree 0
    Toll is mistaken. The 3% down is not the problem; 3% down with a 28 dti is fine, but 3% down with a 45 or 50 dti is a recipe for disaster. Loan programs -even neg ams - are not the problem. The key to succes is matching the mortgage program and rat with the borrower's financial plan. And none of the reforms address that;they just take the nanny-state approach of trying to protect the borrower from himself.
  • JJCooney | | 24 Oct 2014, 07:07 PM Agree 0
    VA mortgages on 100% of value. Very few foreclosures. Responsible buyers. Quality appraisers on the VA roster paid a reasonable fee for their work.Get rid of Dodd Frank and the amc's.
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