Wall St. wins Capt Obvious award

[smileyman]

Originally Posted by pauldun170

Unfortunately a big chunk of foreclosures nowadays are by folks who, at the time of signing were solid candidates for the mortgage they got into.
As they say...shit happens.

Thanks for that. Not everyone had an adjusting or sub prime loan. Some of these folks are victims of the whole mess not the cause.

[goof2]

Originally Posted by pauldun170

Your looking at it wrong.
The person at the desk is the entry point..not the whole system.



Absolutely correct.
Financial institutions have to be able to report that they are complying with state and federal laws. However that doesn't deny the institutions to ability to mitigate risk. The key thing is documentation.

Both problems boil down to the issue of standardization. My impression is the view from the top of these institutions is the best way to prevent either problem is through demonstrable standardization in lending practices. Right or wrong I think they see more standardization as better which removes their guy at the desk from the equation.

[smileyman]

Originally Posted by pauldun170

2 people sitting at a desk.
One, the person that wants to money to buy something
The other with the money.

In the big rush to standardize and streamline and automate everything, they have eliminated judgment.

There is no test or cheat sheet or standard. Its judgment and common sense of someone with experience.

As a professional banker of over 18 years there is little of the second part to draw on. Alot of bank officers at that level lack both judgemtn and common sense.

[smileyman]

Your not going to be ale to legislate and regulate enough in a 'free market' banking system to eliminate stupidity. You could however keep the govt guarantee standards high enough to avoid this sub prime business. However one administration thought it was party duty to put everyone into home ownership.

Still i am thinking only part of this mortgage housing mess is mtg defaults.

What about the SEC and their investment standards? Played a part I am sure.

The trickle down is whole industries were effected and all those wage earners suffered, piling onto the problem...

[pauldun170]

Originally Posted by smileyman

As a professional banker of over 18 years there is little of the second part to draw on. Alot of bank officers at that level lack both judgemtn and common sense.

Keep in mind that my view is that those in the branch are the point of entry not the whole process.

Going to your comment...
Is that inherent in the position or is that a result of market forces aka the dumbing down of the process (and the people) due to technical innovation?

[pauldun170]

Originally Posted by smileyman

Your not going to be ale to legislate and regulate enough in a 'free market' banking system to eliminate stupidity. You could however keep the govt guarantee standards high enough to avoid this sub prime business. However one administration thought it was party duty to put everyone into home ownership.

Still i am thinking only part of this mortgage housing mess is mtg defaults.

What about the SEC and their investment standards? Played a part I am sure.

The trickle down is whole industries were effected and all those wage earners suffered, piling onto the problem...

Ratings agencies played a huge role.
"We're not sure what ya got in there but traditionally we gave em a high marks so we'll just do the same for you. Have a nice day..."

Its like border patrol letting all Toyota Camrys cross the border without inspecting or checking ID because traditionally they never had problems with people driving Camrys.

[pauldun170]

http://finance.yahoo.com/real-estate...realestate-buy

[goof2]

Originally Posted by pauldun170

Ratings agencies played a huge role.
"We're not sure what ya got in there but traditionally we gave em a high marks so we'll just do the same for you. Have a nice day..."

Its like border patrol letting all Toyota Camrys cross the border without inspecting or checking ID because traditionally they never had problems with people driving Camrys.

While the result is the same I disagree on the thought process involved. In my view it was more of a "We don't need to see the details, house values never ever go down so if your securities is backed by real estate the investment is safe."

To use your metaphor it would be like someone having years of trouble free Camry ownership getting another Camry based on that reputation.

Originally Posted by pauldun170

http://finance.yahoo.com/real-estate...realestate-buy

So a bank can't get their shit together enough to foreclose on an essentially worthless shotgun shack that the borrowers haven't made a payment on in over two years. Sounds like a lose-lose to me.

[smileyman]

Originally Posted by pauldun170

Keep in mind that my view is that those in the branch are the point of entry not the whole process.

Going to your comment...
Is that inherent in the position or is that a result of market forces aka the dumbing down of the process (and the people) due to technical innovation?

Technoligically speaking L.O.s have so much more data to play with they should be able to make a good sound loan. Cash flow analysis software, credit scoring models, regional trend analysis.

What it seems to boil down to is the human element is easily distracted and seduced. Originating for bonuses, doing solids for your frat boys, inter bank rivalries, ego, got coked up and was doing the secretary while I was approving loans...On and on. And internal audit and review gets told to look the other way when the board likes the bottom line.

[Captain Morgan]

Originally Posted by Homeslice

They foreclosed after only 1.5 months? That makes absolutely no sense. It's rare to find ANY bank that forecloses within the first 6 months after the borrower stops paying.

Originally Posted by 101lifts2

After 30 days you are techinically in default, but you will not recieve a Notice of Default letter until 90 days. Then you have an additional 20 days which to settle the debt with the bank or they foreclose. And if you rent to someone, they have an additional 90 days. Remember, B of A stopped foreclosures because shit is so fucked up. I've heard they are doing more short sales and modifications instead. Short sale FTW!

I've known people to stay in their house 2 years before the sheiriff comes and gives you a 3-day notice.

Originally Posted by pauldun170

Yup...story definitely sounds fishy.
Foreclosure is big expensive process and generally is something a bank wants to avoid.

I agree, it sounded fishy to me, too. From my understanding, he had been arguing with the bank for several months, had never truly missed a payment, was in the process of taking the bank to court and about a month and a half after filing was when they decided to foreclose. Like I said, I don't have all the details so don't really believe it all.