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   New regulations are an America-destroying attack on honest business people's God-given Constitutional rights to make undocumented fraudulent loans that American taxpayers end up owing

10 Jan 2013 10:10 AM   |   6312 clicks   |   Chicago Trib
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TheOther     
SATAN!

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10 Jan 2013 10:15 AM
r1niceboy     
I've worked for a company that used to dry shaft people by doing this. Guaranteed they'll create a stink about it, while simultaneously holding secret meetings to find ways to do the same thing while being within the letter of the law.

10 Jan 2013 10:16 AM
mytdawg     
golfclap.jpg

10 Jan 2013 10:17 AM
Cold_Sassy     
FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.

10 Jan 2013 10:17 AM
thurstonxhowell     
If we would just let the free market free the free market, those guys would go out of business and there would be no problem. How can regulation solve a problem that regulation created?

10 Jan 2013 10:17 AM
Pincy     

Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.


I'm sorry, is someone forcing banks to make loans to people with that much debt?

10 Jan 2013 10:19 AM
The Jami Turman Fan Club     
Wait, you can have no more than 43% of your income as debt? So I can't buy a new house while renting out my old one? That'll suck. My sister had to rent out her old house for two years before it finally sold.

10 Jan 2013 10:20 AM
thurstonxhowell     

Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.


This means "payments on total debts" not just "total debts", right? If it doesn't , uh-oh...

10 Jan 2013 10:20 AM
max_pooper     

Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.


43% is total debts (student loan payments, car loans, ect. plus would be mortgage payment). When I bought my house last year the lenders my mortgage broker was dealing with would allow up to 45% debt to income ratio. Then again, I had a credit rating of 800.

10 Jan 2013 10:20 AM
Baelz    [TotalFark]  
Screw the banks. We're buying everything outright with cash now. It's amazing once you break the cycle of debt, and interest payments. It sucked at first but now we own everything outright, and in a few years will own our own home we are building. My bank account went from going from check to check, to having $1000's in it.

You don't need the banks, they need you. Take 3-5 years of living modestly, and save your money. Pay off your car loans, buy your own property with cash, build a modest house ($35-50k materials). You don't need 2500 sqft, and a 30 year mortgage making you a serf to a bank.

10 Jan 2013 10:21 AM
Zeb Hesselgresser     
So we're going to keep legislating out self destructive behavior? Cool, that always works.

10 Jan 2013 10:21 AM
thurstonxhowell     

The Jami Turman Fan Club: Wait, you can have no more than 43% of your income as debt? So I can't buy a new house while renting out my old one? That'll suck. My sister had to rent out her old house for two years before it finally sold.


Seems like you wouldn't be able to buy a house until your car was paid off, either. God help you if you have student loans.

10 Jan 2013 10:22 AM
Farksteron     

The Jami Turman Fan Club: Wait, you can have no more than 43% of your income as debt? So I can't buy a new house while renting out my old one? That'll suck. My sister had to rent out her old house for two years before it finally sold.


That rent being paid is also income

10 Jan 2013 10:22 AM
The Jami Turman Fan Club     

Farksteron: The Jami Turman Fan Club: Wait, you can have no more than 43% of your income as debt? So I can't buy a new house while renting out my old one? That'll suck. My sister had to rent out her old house for two years before it finally sold.

That rent being paid is also income


Yeah, but it's at 43%. If I owe $400 a month on my mortgage and they're paying me $500 a month for the house and paying for the utilities and upkeep, that's going to hurt my ability to get a mortgage.

10 Jan 2013 10:24 AM
max_pooper     

Farksteron: The Jami Turman Fan Club: Wait, you can have no more than 43% of your income as debt? So I can't buy a new house while renting out my old one? That'll suck. My sister had to rent out her old house for two years before it finally sold.

That rent being paid is also income


Lenders will generally allow for 75% of rental income to be counted towards debt to income ratio.

10 Jan 2013 10:25 AM
Tommy Moo     
no more loans where the principal due increases over time,

Huh? All loans work this way. My payment stays the same, but I'm currently paying about $40 in principle more each month than when I made my first payment.

10 Jan 2013 10:27 AM
Mr. Right     

Pincy: Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.

I'm sorry, is someone forcing banks to make loans to people with that much debt?


No, the government is underwriting loans so that there is the possibility of huge profits with no potential loss, as that will be underwritten. The Fed and the Treasury department have been in bed with bankers for too long. None of these regulations are going to prevent bankers from making more money than they deserve. They will end up limiting the ability of middle and lower income folks ever building or maintaining any wealth. But don't worry about bankers and government officials - they will be just fine and their wealth will be untouched and never at risk.

Meanwhile, the flow of campaign contributions from bankers and financiers will continue unabated. If you want any influence with politicians and regulators, you need to be able to pony up come campaign season.

10 Jan 2013 10:27 AM
Slaves2Darkness     

Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.


And this is how those hated regulations get enacted. You are blaming the government because they did not stop the banks from being morons?

10 Jan 2013 10:27 AM
Demagol     
As a foreclosure defense attorney this makes me sad and happy. Sad because of the potential for business drop off, happy because this adjustable rate, subprime, lost note BS never should have happened in the first place

10 Jan 2013 10:28 AM
Cold_Sassy     

Pincy: Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.

I'm sorry, is someone forcing banks to make loans to people with that much debt?


No, they're not. However that is the whole point of this article: Banks [once again] making shaky loans that will inevitably be defaulted on and paid by financially-responsible taxpayers.

I also agree with Baels, and pay cash for most everything I buy. He/She is absolutely correct. I don't like being in dept up to my a*s. I don't care about the Jones's.

10 Jan 2013 10:32 AM
monoski     
So does Rent-a-Center go out of business later today or is it just limited to mortgages?

10 Jan 2013 10:32 AM
chrylis     

Tommy Moo: no more loans where the principal due increases over time,

Huh? All loans work this way. My payment stays the same, but I'm currently paying about $40 in principle more each month than when I made my first payment.


They're talking about the outstanding principal balance increasing, not the amortization effect where constant payments on a lowering balance means more goes to principal. There are some mortgages out there, such as some option, ARMs, where the debtor can pay less than the interest each month.

10 Jan 2013 10:32 AM
Tommy Moo     

thurstonxhowell: The Jami Turman Fan Club: Wait, you can have no more than 43% of your income as debt? So I can't buy a new house while renting out my old one? That'll suck. My sister had to rent out her old house for two years before it finally sold.

Seems like you wouldn't be able to buy a house until your car was paid off, either. God help you if you have student loans.


A new car payment and a monthly payment on $50k in student loans will total maybe $500/month. If you're only bringing home $1150/month, then yeah, you probably aren't in a position to buy a house. Also, you shouldn't have bought a new car.

10 Jan 2013 10:32 AM
trotsky     
If we would just all use bitcoins, the fiat-free currency of the future, we could all go Galt and enjoy our beef jerky, dried strawberry and incredibly complicated payment methods for a burrito at a NYC restaurant. Bitcoin: where getting 50% of your investment back from a ponzi scheme is profit!

Bitcoin!

10 Jan 2013 10:32 AM
Tommy Moo     

The Jami Turman Fan Club: Wait, you can have no more than 43% of your income as debt? So I can't buy a new house while renting out my old one? That'll suck. My sister had to rent out her old house for two years before it finally sold.


Seems you ought to be able to list the rental money as "income," which would bump your debt to income rate back down.

10 Jan 2013 10:33 AM
vudukungfu    [TotalFark]  

Baelz: Screw the banks. We're buying everything outright with cash now. It's amazing once you break the cycle of debt, and interest payments. It sucked at first but now we own everything outright, and in a few years will own our own home we are building. My bank account went from going from check to check, to having $1000's in it.

You don't need the banks, they need you. Take 3-5 years of living modestly, and save your money. Pay off your car loans, buy your own property with cash, build a modest house ($35-50k materials).


Hey. that's what I did. Don't tell everyone. They'll want to do it, too.
/no they won't

10 Jan 2013 10:33 AM
the_geek     

The Jami Turman Fan Club: Wait, you can have no more than 43% of your income as debt? So I can't buy a new house while renting out my old one? That'll suck. My sister had to rent out her old house for two years before it finally sold.


The rent paid on the first house is additional income.

10 Jan 2013 10:34 AM
Tommy Moo     

Baelz: Screw the banks. We're buying everything outright with cash now. It's amazing once you break the cycle of debt, and interest payments. It sucked at first but now we own everything outright, and in a few years will own our own home we are building. My bank account went from going from check to check, to having $1000's in it.

You don't need the banks, they need you. Take 3-5 years of living modestly, and save your money. Pay off your car loans, buy your own property with cash, build a modest house ($35-50k materials). You don't need 2500 sqft, and a 30 year mortgage making you a serf to a bank.


Nicely done. I bought modestly. I did take out a mortgage, but I make an average of 150% payment each month. When my dad passed, I spent a chunk of my inheritance on updating the kitchen, and put every penny of the rest into the principle. I'm in a position to pay off my 30 year in about 8 years total.

10 Jan 2013 10:35 AM
Flakeloaf     

Baelz: Screw the banks. We're buying everything outright with cash now. It's amazing once you break the cycle of debt, and interest payments. It sucked at first but now we own everything outright, and in a few years will own our own home we are building. My bank account went from going from check to check, to having $1000's in it.

You don't need the banks, they need you. Take 3-5 years of living modestly, and save your money. Pay off your car loans, buy your own property with cash, build a modest house ($35-50k materials). You don't need 2500 sqft, and a 30 year mortgage making you a serf to a bank.


This. My dad died broke and left my mother basically one employed child away from being on welfare, and the first thing the bank manager said was "take out a line of credit and enjoy your life". For the sake of my clean criminal record I'm very happy I don't know who this man is.

10 Jan 2013 10:36 AM
Keeve     

Pincy: Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.

I'm sorry, is someone forcing banks to make loans to people with that much debt?


Not really. What happened is that in an attempt to provide housing for all (a noble gesture) the government in the 1990's had the bright idea of guaranteeing all loans including high-risk loans. Before that, lenders wouldn't give you a loan if they didn't think you could pay it back. That's not to say the government is entirely at fault. A few smart lenders saw the folly in this government guarantee, in that eventually the "free" money would run out. The greedy lenders however went above and beyond in taking advantage of the new policy, as did their partnering real estate firms who did their best to convince everyone (but mostly the at-risk buyers) to purchase homes they had no chance of ever paying off. Top this off with loan ranking firms falsifying all their loan ratings because there were never any guidelines to keep them in check.

10 Jan 2013 10:37 AM
The Evil That Lies In The Hearts Of Men     

Baelz: Screw the banks. We're buying everything outright with cash now. It's amazing once you break the cycle of debt, and interest payments. It sucked at first but now we own everything outright, and in a few years will own our own home we are building. My bank account went from going from check to check, to having $1000's in it.

You don't need the banks, they need you. Take 3-5 years of living modestly, and save your money. Pay off your car loans, buy your own property with cash, build a modest house ($35-50k materials). You don't need 2500 sqft, and a 30 year mortgage making you a serf to a bank.


There's one trick to this: Own a house first.

CSB:

A couple of years ago I was trying to buy a house. Before then I paid for everything in cash and didn't have any credit cards. I also didn't have any car loans or student loans (went to school outside the US, but had lived in the US for some time at this point). No history of debt at all. I also brought with me a 20% deposit.

It was very hard to get a mortgage. I had to go to a dozen banks before I could find one who would work with me. Every single one advised me to get two or three credit cards and build up a history of making payments on time for a year before applying for a mortgage and none were happy to be dealing with someone who had a long history of living within their means.

10 Jan 2013 10:39 AM
dv-ous     

Tommy Moo: no more loans where the principal due increases over time,

Huh? All loans work this way. My payment stays the same, but I'm currently paying about $40 in principle more each month than when I made my first payment.


By principal, they mean total owed, not the amount in the payment. (So, loans where monthly payment is less than interest accrued. Presumably ARMs.)

10 Jan 2013 10:39 AM
chewd     

Tommy Moo: Nicely done. I bought modestly. I did take out a mortgage, but I make an average of 150% payment each month. When my dad passed, I spent a chunk of my inheritance on updating the kitchen, and put every penny of the rest into the principle. I'm in a position to pay off my 30 year in about 8 years total.


Good for you... lets hope AIG doesnt make all that equity vanish overnight like they did for me.

10 Jan 2013 10:39 AM
dv-ous     

Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.


The 28% figure was probably for just the mortgage by itself. This is for the total of all debts. (Credit card, car payments, etc.)

10 Jan 2013 10:40 AM
Cold_Sassy     

Slaves2Darkness: Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.

And this is how those hated regulations get enacted. You are blaming the government because they did not stop the banks from being morons?


Why yes, yes I am. You know why? Because banks got bailouts from the government while a lot of other honest hard-working people lost all they had in the free-for-all mortgage scams. The government also pleged to put new regulations in place to keep the greedy bank b*stards from a repeat performance in wrecking the enonomy. Now here they go again.

Now do you get it?

10 Jan 2013 10:41 AM
Bullseyed     
"end up owning"? How about you don't bail out companies and then the taxpayer doesn't have to deal with it.

10 Jan 2013 10:41 AM
GoodyearPimp     

Tommy Moo: A new car payment and a monthly payment on $50k in student loans will total maybe $500/month.


Uhm, no. At least 600, closer to 700 if not more.

10 Jan 2013 10:41 AM
WhoopAssWayne     
The dumbass democrats required banks to give mortgages to people who couldn't afford them and we are still suffering for this idiocy today. It's exactly the kind of feel good, bread and circuses stupidity - while loudly shouting down the actual results and consequences - that liberal democrats are known for. This is one step forward out of the mess they've created.

10 Jan 2013 10:42 AM
mod3072     

Slaves2Darkness: Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.

And this is how those hated regulations get enacted. You are blaming the government because they did not stop the banks from being morons?


It's not that the government didn't stop them, it's that they actively encouraged it, underwrote the loans, then bailed out the banks while leaving the homeowners twisting in the wind and then sent us the bill. If you or a bank or anyone else wants to write bad loans, I don't have a problem with that. When the government starts guaranteeing those loans with taxpayer dollars and assuring the banks that no matter how badly they fark up the government will be there to bail them out, THAT I have a problem with. When the government looks the other way while banks bundle large bunches of crap loans together, bribes a rating agency to say that they are solid, and then sells them to municipalities and retirement funds as a solid investment, THAT I have a problem with. If you are stupid enough to take out a 50 year, interest only, adjustable-rate mortgage, I really don't give 2 shiats that you are almost certainly going to lose your home eventually. When you do that and then I have to pay for the inevitable bailout on top of having my community lose money because they bought a bad investment (which I will have to make up in higher property taxes) while simultaneously watching the money I have saved over the course of my career disappear due to these shiatty investments that the trusted rating agencies assured us were solid gold, I have a bit of a problem with it.

10 Jan 2013 10:43 AM
KingsleyZisou     

chrylis: Tommy Moo: no more loans where the principal due increases over time,

Huh? All loans work this way. My payment stays the same, but I'm currently paying about $40 in principle more each month than when I made my first payment.

They're talking about the outstanding principal balance increasing, not the amortization effect where constant payments on a lowering balance means more goes to principal. There are some mortgages out there, such as some option, ARMs, where the debtor can pay less than the interest each month.


It's still a form of amortization. It's just negative am. That's what the reg refers too. Article didn't do a good job of stating that.

10 Jan 2013 10:43 AM
alabasterblack    [TotalFark]  

Pincy: Cold_Sassy: FTFA: In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.


WTF?? When I bought my house (before all of this B.S.started) the maximum allowed by any reputable morgator was 28%. No wonder the same old sh*t keeps happening. Good jerb, Gubmint.

I'm sorry, is someone forcing banks to make loans to people with that much debt?


You know, you will pay risky loans in the end, just like last time. Thanks taxpayer!

10 Jan 2013 10:43 AM
dv-ous     

thurstonxhowell: The Jami Turman Fan Club: Wait, you can have no more than 43% of your income as debt? So I can't buy a new house while renting out my old one? That'll suck. My sister had to rent out her old house for two years before it finally sold.

Seems like you wouldn't be able to buy a house until your car was paid off, either. God help you if you have student loans.


Given the average/median incomes and net worth figures for the 20-something crowd, if your car is that expensive, or if your student loans are that massive, then you've already made some poor decisions and are probably not a safe investment.

But don't let me dissuade you of the notion that society owe you the American Dream by 25, regardless of your previous choices.

10 Jan 2013 10:49 AM
BMFPitt     
Kill Fannie & Freddie.  Abolish the FHA.  Abolish the mortgage debt subsidy.  Make it a capital crime to suggest a bailout of any private enterprise in Congress.  Stop trying to prevent houses from being affordable.  That is all.

10 Jan 2013 10:49 AM
chrylis     

KingsleyZisou: chrylis: Tommy Moo: no more loans where the principal due increases over time,

Huh? All loans work this way. My payment stays the same, but I'm currently paying about $40 in principle more each month than when I made my first payment.

They're talking about the outstanding principal balance increasing, not the amortization effect where constant payments on a lowering balance means more goes to principal. There are some mortgages out there, such as some option, ARMs, where the debtor can pay less than the interest each month.

It's still a form of amortization. It's just negative am. That's what the reg refers too. Article didn't do a good job of stating that.


Of course it is. That's what I get for posting with a stuffed-up head and no sleep...

10 Jan 2013 10:50 AM
Incog_Neeto     
There would have been no problem with the old rules had we not bailed out the banks and allowed their stupidity to put the out of business. It's all about the free market until your company is begging Washington for a handout.

10 Jan 2013 10:50 AM
TNel     

GoodyearPimp: Tommy Moo: A new car payment and a monthly payment on $50k in student loans will total maybe $500/month.

Uhm, no. At least 600, closer to 700 if not more.


Seriously, a car payment is usually 350 a month. A 50k loan's monthly payment will be atleast $300 a month so yeah his math is way off.

10 Jan 2013 10:51 AM
RidgeRunner5     
Does that mean the Federal Reserve will be busted for making all those undocumented loans with taxpayer dollars to foreign banks and companies without Congressional approval or even knowledge?

10 Jan 2013 10:52 AM
cig-mkr     
Was there anything about the down payment ? I didn't see anything about that issue. If they want "more skin in the game" then a down payment requirement should be in place too.

10 Jan 2013 10:53 AM
jayphat     

Tommy Moo: no more loans where the principal due increases over time,

Huh? All loans work this way. My payment stays the same, but I'm currently paying about $40 in principle more each month than when I made my first payment.


I think that's bad writing on the reporters end. I believe it's meant to keep people front back diving loans. Where say principal payments are $10 for the first year, then $20 for the second, so on and so forth, BUT the interest payments are growing as well. Kind of like reverse back diving contracts in the NHL, where the first few years are loaded with millions and millions of dollars, but the last 4 are $250K. I BELIEVE this is meant to keep people from getting hooked into a mortgage, then have the thing swell to a proportion they can't possibly pay.

10 Jan 2013 10:54 AM
Mr_H     
I'd be happy just knowing who owns my mortgage on any given day. We just moved and before I made my first payment it's been sold twice.

10 Jan 2013 10:56 AM
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