Concerns About Riskier Mortgages are Sprouting While Others See it as Welcome Change

Guy Cecala, publisher of Inside Mortgage Finance, says…

“Such fears are unfounded, noting Federal Reserve officials have complained that FHA loan standards have been too rigorous.”
“The non-banks are bringing a welcome change”

Bill Emerson, vice chairman of Quicken Loans, the largest non-bank lender, says…

“I don’t have any concerns about” a potential increase in delinquencies or defaults, Emerson said in an interview. “In the last three, four years, consumers have more access to credit….and all of a sudden it’s, ‘Here we go again.’


Concerns About Riskier Mortgages are Sprouting While Others See it as Welcome Change

Riskier borrowers are making up a growing share of new mortgages, pushing up delinquencies modestly and raising concerns about an eventual spike in defaults that could slow or derail the housing recovery.

The trend is centered around home loans guaranteed by the Federal Housing Administration that typically require down payments of just 3% to 5% and are often snapped up by first-time buyers. The FHA-backed loans are increasingly being offered by non-bank lenders with more lenient credit standards than banks.

The landscape is nothing like it was in the mid-2000s when subprime mortgages were approved without verification of buyers’ income or assets, setting off a housing bubble and then a crash. Still, for some analysts, the latest development is at least faintly reminiscent of the run-up to that crisis.

More here…


2 Responses to “Concerns About Riskier Mortgages are Sprouting While Others See it as Welcome Change”
  1. Tom says:

    As long as they continue to have the borrower’s carry that force placed insurance, PMI/MIP, the same results will happen the next time around with a huge increase in foreclosure fraud.
    That 80% of the loan amounts insured by the government, (that the borrower’s pay the premiums on), is what motivates the TOO BIG TO FAIL & TOO BIG TO JAIL banks, lawyers, and judges to force through as many fraudclosures as they can to collect on that insurance payout.
    When they do as they did to me, where they wouldn’t accept the full payoff of the mortgage from me, proves just how big that scam is, and what is motivating them to force as many fraudclosures as they can.
    Why wouldn’t they accept my full payment that was double for what they resold my home for after they stole it? The 80% insurance payout to the bank plus the reselling of the home gave them more profit to force the fraudclosure.
    Once anyone is targeted by that scam, they will lose!
    The amount of fraud involved goes too high on the ladder of corruption for anyone to even think of stopping it!
    Anything you present in court will be thrown out because they will make new laws, “on the go plan” that fits their needs and to hell with yours just to steal your homes.
    Myself and many other’s I know went through this the first time around starting in 2009, and it is still going on now, and it will only get worse.
    Total scam and fraud with everyone involved lining their pockets with government insurance money.
    Remove the insurance, PMI/MIP, and the foreclosures would drop.
    Take away that motivating factor where they won’t collect that scam insurance payoff and they won’t have any reason to steal as many homes fraudulently.
    They say that the insurance was put in place to protect the banks, but the banks just used that as a means to use home-buyer’s as pawns in their scam to funnel that insurance money back to the banks.
    They first had the PMI, which was for low down-payment loans.
    Then they came up with MIP for all loans with more than 20% for down-payments.
    That insurance is just future revenue for the banks.
    They will force more foreclosures sooner or later just to keep that insurance money flowing back into their pockets.
    If they get caught in any part of committing some fraudulent activity, they just pay a small fine, that is built in their fraud budgets.
    It will continue to work as long as no one looks at the actual larger scam that is going on.
    So far, no one that I know of, has seen any law enforcement getting involved to stop it either!
    They are either not believing what the victims have gone through, or they are getting their pockets lined as well.
    When you have a Court Recorder supplying people with documents that proves the fraud, and nothing is done to stop it, that also shows just how corrupt the banks, lawyers, and judges are, and how much control they all have in making that scam work.

  2. Elizabeth Acevedo says:

    Sure, why should the likes of Quicken be concerned? Those paying the FHA premiums should be terrified as they and all the other taxpayers will be the ones forced to pick up tab when others default, not Quicken.

    FHA doesn’t even bother to check the the homes being underwritten meet their underwriting standards. If anything, FHA is still to lax when it comes to ensuring the stability of its own program.

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