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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (27953)	3/10/2005 7:22:23 AM
From: Tradelite	Read Replies (1) \| Respond to of 306849

oh, and as follow-up to my last post, also ask the lender about the difference in loan terms when it comes to actually occupying the property as a principal residence or using it as investment (or "speculative") property. If people are lying to their lenders about occupying the property in order to get a lower interest rate or better loan terms than an investor would, they are violating federal law. If any lender winks at the borrower's mispresentation about what he plans to do with the loan and the property, the lender risks a serious legal offense, as well. The world doesn't operate the way many people appear to assume it's operating these days. People such as Spitzer in New York are watching. How much risk should we assume people and institutions are taking? Felonies are not funny. Just ask Martha Stewart. <<Gg>>

To: Tradelite who wrote (27953)	3/10/2005 7:37:14 AM
From: orkrious	Respond to of 306849

Report back to us all on the results of your research. Until you can do that, accept all other assertions with at LEAST a grain of skepticism. That would be healthy. Mrs. Ork has been a RE agent her whole life. The last two years she has told me many stories which are typical of the example in Fleck's column. My research has been done.

To: Tradelite who wrote (27953)	3/10/2005 7:42:49 AM
From: damainman	Read Replies (1) \| Respond to of 306849

Don't need a blog or to talk to a lender, my brother in law was given these options in nov: 1. line of credit (yes, to buy a house) 2. interest only 3. 3 year arm All with 0 down. They gross 38k last year and have 2 kids. They were approved by the lender for ctx to buy a 255k house.Right now they're at the nonrefundable deposit stage and it's gonna be interesting to see what happens as rates have gone way up since they were approved. In 1993 I applied for a 120k mortgage with a 20% downpayment on a condo. I was single and grossed 50k, with no car payment or credit card debt or student loan. They called me in 2x for additional questions and 2 more months worth of bank statements and gave me a hard time about being on this job for only 2 years and said this loan would take awhile because they had to get "additional approval." Based on my personal experience, YES they ARE giving away mortgages. I'm not even going to start in on the dinner party stuff about how many houses people I know own. Other people's story's just serve to corroborate my own experience with this real estate BUBBLE. Or maybe these home prices are just a currency phenomenon... I should write this in a blog or something. 0 0

To: Tradelite who wrote (27953)	3/10/2005 11:29:00 AM
From: GraceZ	Respond to of 306849

Back in 1993 we bought an investment property. The property was dirt cheap, $50k. They made us put 25% down and pay 1.5% higher rate for the mortgage. I remember having to document up the whazoo even though we owned two other cashflow positive properties and we had leases on the new one that covered twice the mortgage payment. I remember having the loan officer complain that the loan was too small for them to get paid for their time to document it. A few months ago, across the street an investor bought a house identical to ours with less than 5% down and a comparable rate loan for a house he would live in, no investor premium. The house price was $220k and the rents cover 60% of the PITI payments. What is funny is that the bank saw more risk back in 1993 at 50k than they see now at 220k. Human nature is so predictable.

To: Tradelite who wrote (27953)	3/11/2005 1:13:18 AM
From: Amy J	Read Replies (1) \| Respond to of 306849

Tradelite, it's not a myth that lenders are loose. Even we've had a real estate lender call our firm asking for a former employee's salary, which we couldn't do until we received the employee's signature approval to do so. The lender never bothered to supply this, so we couldn't provide them the information until we got the faxed signature. But it didn't matter, you know why? The lender loaned the money - before getting employment and salary information ! Another employee's lender did not even bother to confirm employment. That's what's going on these days. So, when it snaps don't say we didn't tell you so. Like the other poster said, it used to be the norm to check salary. Regards, Amy J