Profile picture for lehithelma

Why won't some smart banker or mortgage co go ahead and do HARP 3.0? Congress is useless. Merkley i

  • October 23 2013 - Lehi
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Answers (7)

Profile picture for SoCal Engr
I am not a lender, but I'll provide my consumer perspective and trust the mortgage pros to correct the egregious errors...

For the most part, lenders aren't making their money by "lending" and holding the loan. They're making money by selling the loan. To do HARP 3.0, the lenders would have to find an idiot willing to guarantee to buy the resulting upside-down loans, and pay a premium for the privilege.

Absent politicians and bureaucrats spending our tax dollars, there's no one capable of playing the role of "idiot".
  • October 24 2013
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Indeed, congress is the opposite of progress..
  • October 24 2013
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Profile picture for Brookstone Mortgage
Not sure who said BofA was smarter than you or what them being fined has to do with HARP 3.0. Sorry you don't get the analogy but the fact remains that there is nothing "smart" about a lender doing harp 3.0. As a business practice, it's quite stupid. You clearly don't have a good understanding of how it works or what a mortgage company is or does. Suggesting that a bank or mortgage company operate independently of Fannie/Freddie to enact HARP 3.0, and that it would be "smart" to do so, suggests that further research on your part may be required. 
  • October 24 2013
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Profile picture for lehithelma
so banks like BofA (fined 843 million dollars for mortgage fraud today are smarter than me?
really?
Car analogy is dumb.
There are whole streets of foreclosed, empty trashed newer homes in Pinal county, AZ.  How smart is that?
  • October 24 2013
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You've painted better analogies, but still high scores compared to the average.


Key factor here is the directions were asked for by a pedestrian.
I kind of don't blame them.  The media holds the reins.

  • October 23 2013
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Profile picture for Brookstone Mortgage
What exactly would be "smart" about it? 

Here's an analogy for you;

Your son asks you to use your credit to buy a car for him because he doesn't have credit. You buy the car cash with title in your name and your son agrees to pay you back in monthly installments. After about 2 years he says he can't afford them anymore so you agree to lower the payments and extend the term. This works for you because you don't want to be stuck with a car that has depreciated and you will never get your money back and because this is debt you already own. You reduce risk of default by doing this and it's a win win right?

So... since that worked out so well for you, I assume you, being a "smart" business person, will immediately put an add on Craigslist stating that you would be happy to take EVERYONE with upside down car notes and rework their payments for them. You will immediately start buying car notes at 200% of their value and writing 60 month contracts for them because it will be so profitable for you to do so. 

Yes, now that's smart... very smart! 
  • October 23 2013
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Unfortuantely, it's not that simple.  If Freddie Mac or Fannie Mae wont purchase the loan after it's complete, the bank would be stuck with an unsalable loan and be out all that money.  Most banks work off an warehouse line of credit and once the loan is closed, it is sold off to an investor to recoupe the funds.

  • October 23 2013
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