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Wealthy mortgage borrowers face cold shoulder from lenders
61–70 of 191 posts
Re: Wealthy mortgage borrowers face cold shoulder from lenders
#62Why exactly should we care about wealthy borrowers at this point, when millions of people are losing their jobs/health insurance...? So what if they get told no - it is not like they are living in a 500 sq ft apartment anyway
You should have empathy for everyone. You should have empathy for the pain poor people experience and the pain the rich people experience. Someone's income doesn't make them more or less human.
Who is anyone to say what anyone else "should" do?
Re: Wealthy mortgage borrowers face cold shoulder from lenders
#63Wealthy Borrower: "Why can't I refi lower?" Lender: "No, because your loan isn't secured by the government" Wealthy Borrower: "I am just using logic here, you're telling me a riskier borrower with lower credit than me can refi?" Lender: "If their loan is secured by the government, yes" Wealthy Borrower: "I don't understand" Lender: "Well at least we agree on something" Are you really using logic? Seems like a dubious…
Denmark is also a capitalist country. Social democracy (having a free market while also having nationalized healthcare and a strong social safety net) isn't the same thing as socialism (where the state is run by the proletariat and exists to eradicate the bourgeoisie). Right now, there isn't a single socialist government in the world.
Re: Wealthy mortgage borrowers face cold shoulder from lenders
#64Earlier quoted context omitted.
Underwriters like to see six months of reserves on hand, but they don’t monitor that after the closing.
was close to building a house earlier this year (early March) and was talking to two lenders about construction loan. being self-employed was an extra small bump for underwriting, and I asked about loss of income because the covid19 stuff was just starting to become big news. Both indicated that their underwriters would likely check up after closing - 30 or 60 days after - to check on income at that point, to see if…
Self employed and re-if’d 6 months ago. The 4 brokers I worked with all said they never checked again after closing. So maybe that has changed, but I doubt it)
(Also, unless you have your savings with the mortgage lender, I don’t think the bank can legally check your balances without a some sort of soft credit pull)
Re: Wealthy mortgage borrowers face cold shoulder from lenders
#65Earlier quoted context omitted.
They’re not wealthy by the standard of the Bay Area, which is the point of the comment you’re replying to. Wealth is relative. Otherwise you could say that just about any American middle class family is wealthy — just look at the entire world’s population, where anyone making over something like $40k a year would be in the top 1%. Just to underscore the point, Palo Alto declares not too long ago that anyone making un…
> Otherwise you could say that just about any American middle class family is wealthy — just look at the entire world’s population Any middle class American is wealthy by the world's standard. The quality of life provided by middle class America is the life of the 1%. To not see this is to not understand how most of the world lives, and the challenges people face from being less lucky.
This is exactly my point though. If you look at averages, a jumbo home owner in the US is considered wealthy — but only if you ignore their local market. Like in the Bay Area where you could earn $100k a year and still be considered “low income”. These people may be huge earners compared to the average American. It doesn’t mean they’re living the lavish lifestyles of the rich and famous. A lot of them are living paycheck-to-paycheck. Markets are relative.
Similarly, the average American making over $40k a year will not consider themselves the 1%, but to the average citizen of the world they are.
Re: Wealthy mortgage borrowers face cold shoulder from lenders
#66Earlier quoted context omitted.
The median sales price for a house in the US is $327,000[1]. People buying houses for $1 million are wealthy by any standard. [1] https://fred.stlouisfed.org/series/MSPUS
They’re not wealthy by the standard of the Bay Area, which is the point of the comment you’re replying to. Wealth is relative. Otherwise you could say that just about any American middle class family is wealthy — just look at the entire world’s population, where anyone making over something like $40k a year would be in the top 1%. Just to underscore the point, Palo Alto declares not too long ago that anyone making un…
Agreed. The notion of wealthy needs to be calibrated for local cost of living as do statistics like the CPI.
Re: Wealthy mortgage borrowers face cold shoulder from lenders
#67Earlier quoted context omitted.
Just a nitpick, your mortgage isn't secured by the government. It's actually owned by the government, Fannie Mae. Your bank is just the middle man that services it. If your bank doesn't want to service it or the government don't think they are managing it correctly they will move it to another bank. So I'm not surprised these banks don't want to touch jumbo loans right now. That debt is their risk. They can't wash th…
> your mortgage isn't secured by the government. It's actually owned by the government, Fannie Mae. I'm confused what type of mortgages does this apply to? Is a conventional 20% down mortgages owned by the government somehow?
Conventional, FHA, and VA loans are owned by the government.
This came about after 2009 financial crisis, once regulators realized the banks were playing fast and loose with mortgage lending. Unlike TARP, they inherited that debt and have held onto ever since.
Re: Wealthy mortgage borrowers face cold shoulder from lenders
#68Earlier quoted context omitted.
They’re not wealthy by the standard of the Bay Area, which is the point of the comment you’re replying to. Wealth is relative. Otherwise you could say that just about any American middle class family is wealthy — just look at the entire world’s population, where anyone making over something like $40k a year would be in the top 1%. Just to underscore the point, Palo Alto declares not too long ago that anyone making un…
> Otherwise you could say that just about any American middle class family is wealthy — just look at the entire world’s population Any middle class American is wealthy by the world's standard. The quality of life provided by middle class America is the life of the 1%. To not see this is to not understand how most of the world lives, and the challenges people face from being less lucky.
That is true, but there's a flip side problem with this way of thinking: it can lead to a race to the bottom mentality in which improvements are argued against by comparison to those worse off.
"Workers in America don't need better pay or benefits, they're already wealthy by world standards!"
"Workers in China don't need basic safety protections and sane work hours, they're already better off than workers in sub-Saharan Africa!"
Re: Wealthy mortgage borrowers face cold shoulder from lenders
#69Earlier quoted context omitted.
Not sure what this has got to do with empathy. If rich people don't get favorable mortgage, it is at max an annoyance to them. They are not going to be homeless or going to ask for food stamps. If a normal family with one home and one mortgage is not able to refinance or not able to pay their mortgage for a few months, their bank will go after them and they will end up on the street. Sure we can talk about it and fee…
Keep in mind that in high cost of living areas, such as the Bay area, all housing is essentially jumbo mortgages. If jumbo loans are not available or hard to obtain, this means that people who do lose their jobs face an illiquid market and don't have the option to sell their house to avoid default, and thus end up on the street.
I wonder what % of those with jumbo loans are completely out of a job? And further in such circumstances that they cannot afford to pay even a reduced or deferred mortgage payment? Or move into a lower cost apartment in another market? Going straight to the street tomorrow sounds like a stretch with options along the way especially for someone who was in a jumbo in the first place. Loans take a long time to default/evict and lenders are probably not in a rush to put the liability on their books right now either.
Re: Wealthy mortgage borrowers face cold shoulder from lenders
#70Earlier quoted context omitted.
> your mortgage isn't secured by the government. It's actually owned by the government, Fannie Mae. I'm confused what type of mortgages does this apply to? Is a conventional 20% down mortgages owned by the government somehow?
Conventional, FHA, and VA loans are owned by the government. This came about after 2009 financial crisis, once regulators realized the banks were playing fast and loose with mortgage lending. Unlike TARP, they inherited that debt and have held onto ever since.
This is total news to me. So is the US housing industry owned by the US government?
My impression was:
- conventional is within risk margins of banks and they own that risk
- fha requires pmi, that is insurance you buy to cover the extra bank risk
- va, mortgages to veterans that the government own