Jack M. Guttentag The Mortgage Professor

Yahoo! Finance User - Monday, June 9, 2008, 6:11PM ET  Report Abuse

• Overall: 4/5

YSPs are a rip-off. Sure, a potential buyer has the opportunity to shop around, if they want their credit checked (and subsequently lowered) every time they do. The buyer is relying on the honesty of the broker to tell them what their rate will be, based on their credit score. With YSP, the broker is telling them what their rate will be, based on how desperate and naive the broker thinks the buyer is. An extra point or two will end up costing the buyer a LOT of money over the next 30 years. They have the right to know if they qualify for a better rate...and if the broker wants their cut, they should compete with other brokers based on the amount of their fee, not on their ability to more effectively swindle the buyer.

Yahoo! Finance User - Friday, December 14, 2007, 12:25AM ET  Report Abuse

• Overall: 1/5

You know, I was in my Grocery store tonight, & noticed that there was no disclosure on the label of anything telling me how much the store was profiting on the goods I bought. I guess I have the right to shop the grocer across town or buy online if I can get a better deal, after all, thats open market economy, right? So whose job is it to tell me as a lender how much I am entitled to earn? Who protects me from the furniture store guy who makes 400% markup on a couch or table? Where's the jewelry store disclosures about the markup on gold & diamonds? I already have to disclose 38 pages of documents to people covering everything from the rate to what time sunset was today. I am tired of hearing about the mortgage mess. Anyone who wants to can shop for a better deal, and does. Eliminate the huge pile of legal garbage, and make it a 3 page document in bold print, everyone will read that, and we can go about business. If you drive brokers out of the business, then you will be stuck with banks only, hiring teens to take your order like at McDonalds. You think bamks get away with fees like ATM fees, etc??? wait til you are left dealing with 5 banks who will remain. What kind of a moron dreams this stuff up??? At some point don't adults become responsible for themselves? I had a 45 yr old guy call me last week looking to refinance his home, & get $40k cash out. Problem is, he financed 100% almost 2 yrs ago, and the market declined 20%. Plus he had to go get a new car and max out his cards to boot, thereby lowering his FICO. To make it worse he stopped working his P/t Job. So when I asked him where did he think the money was gonna come from, he got indignant & said if I wouldn't someone would. That's the mentality out there. people want what they want & don't get it. Face it some renters were turned into owners last few yrs, & now they'll be renting again..& too many homes were built in some areas. Blame builders. Blame Wall St. Blame morons like that guy who thinks a house is an ATM. Blame the unscrupulous loan officers (yes there are some, just like in EVERY BUSINESS) who put people in loans they never should have got, or commit fraud. But leave my way of earning a living the hell alone.

Yahoo! Finance User - Tuesday, December 11, 2007, 11:58AM ET  Report Abuse

• Overall: 3/5

Everyone is forgetting that people may have walked in to someone’s office to get the loans, but it was the loan officers, underwriters and banks that approved the loan. They made the programs and changed the rules on borrowing. No one twisted their arm to do this. They could have been like other banks and honest brokers. But no, they and investors (flippers) worked hand in hand to put people into these different exotic loans. To make a profit (nothing wrong with that… right!), but now the same people who made money in the market and are still sitting on depressed homes are complaining. That’s business, plain and simple. It started with the broker who seen and made his own judgment on approving and putting the loan though in the first place. Could some of the people put the numbers together, of course? But it is the responsibility of the underwriter to check things out. They did run the credit checks and seen someone who is a cashier at Wal-Mart get a loan for 300k or told them to put down something else on the loan application. What about the brokers who force or assisted in the appraisals. Let’s also remember that the broker/loan officer could have put the person or family into a better loan but talked the people into a different loan only to increase his/her pockets. Let’s also remember what subprime is. It is not only for people with so so credit but also used by investors who have money and who purchased multiple homes. Which now sit empty? But let’s really remember those borrowers no matter how bad there credit support business and the economy. No matter what happens in the next few years their will be winners and losers, in a good or bad market place. To push the blame on some family that wanted and needed the American dream is wrong, to those that looked at the dollars that is the price of expecting big profits. Some will win big others will lose big….. Let’s also look at some of the people who just purchased on speculation. They got homes, went back to the banks and pulled out equity (well fake equity) and then let the homes fall under foreclosure. These are not people who live in the homes. Private builders have done the same. They don’t care about credit and other items as they have their cash already. Then they turn around an buy back the home at a lower price at an auction, this is not something done by a so called “subprime borrower” . Let’s also note that some homes are under or behind due to layoffs in our market place. If credit standards go up and home prices go up and salaries don’t go up this may continue into 2010 or longer. That means that everyone has a part in this and the only answer is not the rate freeze, it helps no one, just delays what will happen later. Will foreclosures happen? Of course, nothing will stop that. But the biggest picture is who will buy these homes, who will buy the homes of sellers who buy homes. If credit standards are now raised and people who maintain their homes who purchased in 04-06 and only primary borrowers with perfect credit buy homes or investors (picking up homes now) who will buy them in the near future? Remember the economic circle, what was new becomes old and it grows outward before coming back in. any home that the current homeowner or investor loses will become empty adding to the empty homes already on the market. So cut the blame! Let’s get to work on correcting this and developing solutions in place to hopefully avoid this happening again. Or limit some of the causes….