El Pinko
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Sun Feb-10-08 10:09 PM
Original message |
SONOMA: Borrowers routinely exaggerated their incomes to afford homes at peak of boom |
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http://www.pressdemocrat.com/EarlyEdition/article_view.cfm?recordID=8611&publishdate=02/10/2008How could so many people afford homes at peak of boom?
By MICHAEL COIT THE PRESS DEMOCRAT Sunday, February 10, 2008
Borrowers routinely exaggerated their incomes to obtain thousands of Sonoma County home loans during the housing boom, a major reason foreclosures are now spiraling to unprecedented highs.
In their eagerness to buy a home, many borrowers inflated earnings by 50 percent or more to qualify for loans they could not otherwise afford, according to a Press Democrat analysis of loans made in 2005 and 2006.
When home prices peaked in 2005, the typical home buyer in Sonoma County claimed to earn $120,000 a year on loan documents, according to federal home loan data. But they actually earned about $80,700, according to Census data. The spread grew in 2006, when the typical buyer claimed to earn $132,000; their actual income was about $79,000.
They were enabled by a mortgage industry that was so eager to hand out money - and rake in lucrative commissions - that it issued many loans without requiring borrowers to document earnings.
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thepurpose
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Sun Feb-10-08 10:10 PM
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1. The mortage industry had no clue income can be verified? Wow! |
Fresh_Start
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Sun Feb-10-08 10:13 PM
Response to Reply #1 |
6. People paid higher rates for no-doc loans |
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if you wanted the best rate, best terms - you provided documentation of income and assets
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Gman
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Sun Feb-10-08 10:24 PM
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13. Oh, that had more than just a clue alright |
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the mortgage companies invented the ways to verify income. The problem is, out of greed, they chose not to use those tools they had to verify income.
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ursi
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Sun Feb-10-08 10:30 PM
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havocmom
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Sun Feb-10-08 10:10 PM
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2. Back when there was a loan officer in the family, they actually verified income |
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It was the industry that got stupid and let people get by with lying if that is what was going on in recent years.
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ingac70
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Sun Feb-10-08 10:11 PM
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3. When I bought my house.... |
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Edited on Sun Feb-10-08 10:11 PM by ingac70
I had to bring pay stubs and 3 years worth of tax returns to show I made what I said I did. It is obvious these mortgage companies helped these people fudge.
On edit: I bought my house in '03.
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IndyOp
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Sun Feb-10-08 10:17 PM
Response to Reply #3 |
9. Yep, me too - pay stubs, tax returns, bank statements... |
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And I have a decent salary and a tiny house. The mortgage companies were failing to do due diligence it seems to me.
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aquart
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Sun Feb-10-08 10:26 PM
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14. And now they're trying to blame their victims. |
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Edited on Sun Feb-10-08 10:28 PM by aquart
on edit: during the NASDAQ bucketshop scandals, traders routinely forged inflated incomes for their clients to justify the extremely risky churning of their accounts. This is no different.
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FreakinDJ
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Sun Feb-10-08 10:11 PM
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4. As directed to by the mortgage brokers |
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A long known trick in the car sales was to inflate the borrower's income. It was ignored by the banking industry so long they finally started doing it in home lending
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BlooInBloo
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Sun Feb-10-08 10:12 PM
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5. Irresponsible lenders lending to irresponsible borrowers... |
Quakerfriend
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Sun Feb-10-08 10:13 PM
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7. Most mortgage Cos require a copy of a W2 as part of the |
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application.
...Blaming the consumer, as usual.
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BlooInBloo
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Sun Feb-10-08 10:51 PM
Response to Reply #7 |
16. Except for alt-a loans. |
Donnachaidh
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Sun Feb-10-08 10:15 PM
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8. oh yeah right -- Joe Schmo homebuyer has the knowledge to deliberately inflate his income |
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To get a loan. The Mortgage brokers AND the underwriters were -just- filling out the forms, and had NOTHING to do with the rampant fraud, right? :sarcasm:
It's another chapter of blame the little guy who is going to lose his home. Perhaps we should re-vamp laws and make it so the mortgage brokers who pushed the loans through on questionable information loses the fees earned on bad loans. THAT would stop all the nonsense dead in it's tracks.
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MadMaddie
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Sun Feb-10-08 10:19 PM
Response to Reply #8 |
10. This is a direct result of deregulation and absolutely no |
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oversight of Mortgage practices.
I believe that just like the S & L loan disaster this is the same magnitude and people (Mortgage companies) should be prosecuted.
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dysfunctional press
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Sun Feb-10-08 10:20 PM
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11. those evil low-income home-wanters hoodwinked those poor innocent mortgage brokers by lying... |
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i sure hope that the federal government comes in to bail out the those well-meaning brokers who were deceived by those dishonest predatory most likely brown-skinned home-buyers. :eyes:
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sandnsea
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Sun Feb-10-08 10:24 PM
Response to Reply #11 |
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I was so angry when people were saying that shit around here.
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Sun May 05th 2024, 05:20 PM
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