alan berk wrote on July 08, 2007 06:58 AM: 23,000 homes for sale ands they are still building new ones. how stupid is that!?

all of those over -inflated houses that people bought with no thought at all! that they thought they could un-load to the next sucker!

oh well - let the insanity continue!

Lender wrote on June 22, 2007 05:38 PM: Yes, Arthur in general the PMI which is Govt back does cover the lender's losses...but I was harking back (you may be too young to remember) to the Savings & Loan debacle, where the Federal Govt did bail out the lending industry....recently in respeonse to the sub prime collapse ...the Congress was again approached to cover these loan loses...thank goodness fiscal prudence prevailed and it was qwashed...I think...let's hope...now as far as those borrowers who intentionally breach the contract...well I too have no sympathy for them...but the number of folks I have seen over the years who purposefully decide upfront to defraud the lender...is quite small really...most people dream and work hard to have a home of their own...and do not like to fact that they fail at providing a basic need in their lives...shelter...most of not all of the default we are seeing now in the banking industry are from those who really did not understand what they were getting into by virtue of their lender/mortgage initiator not telling them truthfully what they were signing up for in the long run. Some of the I/O or Alt A loan documents prepared by these fly by night, parttime or internet brokers need a computor program and 1/2 dozen lawyers to deciper. Key language was/is often buried in obscure language and paragraphs deep within the 12 pages of the Trust Deed or Loan Note. Federal Disclsoure forms really dont help you without a competent and honest loan officer's explanation. Title Co Closing officers donot and cannot give advice at closings regarding the loan documents, so the poor consumner is left to either sign or not get hs/her home they have been waiting all this time. And forget about the Real estate agent...their livihood depends on the deal closing...they sure as heck wont say anything to derail the transaction at close. I have had too many Real estate agents say..."we dont care where or how they get the money to by the property...just fund the damn thing!"

full story wrote on June 22, 2007 12:52 PM: Thank you Lender. I also left a similar comment today under "Arthur" thinking that my full story did not get posted, when in had. I doubt your comment that Lender losses are passed on the "taxpayer". Is this a fact or theory of yours? Please explain. "Mortgage Insurance" probably covers Lender losses; otherwise, the Lender takes the loss or may file defenciency action (which I rarely see in Clark County against the defaulting Joe borrower). Borrowers know what they are signing, a loan. They know their loan has a monthly payment. They know their loan will rise if adjustable or interest only, which is what enabled them to get a loan (home). But then, when the payment rises (as expected) or the market changes such that there is no equity in the home, they intentionally breach the contract and fail to pay the lender; rather than wait it out or lean up until the market changes. Real Estate is not risk free, expect for any gap filled by mortgage insurance :)

arthur wrote on June 22, 2007 12:32 PM: In all cases, the "adult" borrower signed the contract and then decides not to pay the lender, which leads to foreclosure. The borrower will usually live for free until the sale occurs. In many or even most cases, and in the end, the lender will be the one who is the biggest victim: losing $20,000-100,000. This is one side of the story (perhaps the real) side that is untold. There area many "Predatory Borrowers" who feign victim just to prey on the lender. Just think of the tenant who files used to file bankruptcy to stay on a landlord's property for free, hurting the landlord by thousands of dollars.

Lender wrote on June 21, 2007 10:57 AM: Full Story's point is very well taken and true...to a degree...In my 30 years of banking...the lending institutions have access to a vast amount of financial information and background on each borrower...there are no "secrets" when it comes to lending money...so when these banks, mortgage companies, etc. extended credit to these folks...they knew very well who and what they were lending too...they looked the other way...even when home valuations were totally out of whack with reality...they looked the other way....why? For the most part they could sell the paper, bet on the rising market to cover the obvious over leveraged borrower and over valued property and avoid direct responsibility by pushing the cost on to the broader taxpayer base who ultimately foots the bills for these loan defaults. Most of these lenders frankly felt they had no fiducary responsiblity to the borrower to avoid the inevitable melt down we are seeing when real estate markets change direction as they also do!

full story wrote on June 21, 2007 01:14 AM: I am amazed at how the news articles and the comments overlook a key component: The ignorant or predatory borrowers. They "sign" the loan contract and know (or should know) what it means. Many defaulting borrowers operated by greed, and should not have been homeowners. They breach the loan contract, decide not to make payments (but don't move, thus living for free), causing the lender to foreclose and causing the lender to lose money. Typically the Borrower just loses their credit score, and may actually abuse the lender in these situations (living for free while the foreclosure process ensues etc). I see many lenders as equal or even greater victims of any value decrease. What goes up, must usually come down. The borrowers may not be so innocent as many think.

Lender wrote on June 20, 2007 10:46 AM: Yes of course Robin as much information to folks is important. Please publish if you think it will be of use. Thanks

Darthvader wrote on June 20, 2007 10:45 AM: Robin it is ok to do so...It makes me very mad at how the ordinary home buyer (who over paid for shoddy construction aka Pulte Homes) and home owners (suffering from artifically increase valuations and thus proeprty taxes) have been abused these last few years by the so called "real estate community"...which I include GLVAR, the brokers, lenders and developers...yes ofcourse the speculators and "flippers" were the results of conditions set up by the so called professionals...who did not give a damn about the consequences of their predatory actions and grifter practices...now its payback time and the fallout is going hurt alot of folks. Sad...Very Sad

Robin wrote on June 20, 2007 08:36 AM: Dear Darth Vader and Lender,
Your comments about predatory lending may help some locals avoid being a victim. May I have your permission to post to Las Vegas Lemonade website on the Las Vegas Resources page?

Robin
http://lasvegaslemonade.org
We Protect Dreams

Lender wrote on June 18, 2007 10:23 PM: I am a lender with over 3o yrs of experience right here in Las Vegas. I have seen it all. I have shaken my head at the real estate market over the last 7 years. It is time to be very, very, cautious. Rates are heading up and may very well be at 8% by years end. So my advice is to always first go into a reputable bank with whom you have a relationship,or a credit union or speak with a respectfully known long term Las Vegas based financial broker...as they know this local market, its trends and who the good builders may be. Talk candidly with them about what you can realistically afford. Do this before talking to any real estate agent or looking at houses in any development. Set a home purchase budget...stick to this number religiously... and then back off this by at least 10% to account for the unexpected in home ownership. My advice is not to use in house lending programs....unless they can provide written assurances and explanation on the costs associate with their loan program...most of the time you will be much better off using an outside lender. These lenders can arrange construction financing and final "take out" financing which will be clear, to you with no surprises. Also, by arranging your own construction financing, you...not the builder, control the construction process...since you must approve each financing draw as construction progresses...if you have a problem...you retain the leverage over the builder to make it right...or you dont authorize payment! When the financing is in house you have no control...and by the way...dont be fooled...the financing costs are passed on to you either by being built into the cost of construction by the developer/builder... or... by your paying it to the lending institution as things progress....so you really dont save anything using an in house lender and may in fact get some tax advantages by being able to write off the interest charges paid to the bank(check with your tax consultant)

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