Foreclosure Point/Counterpoint

[houndawg]

And to crush the last glimmer of hope, SCOTUS now says corporations can now give as much as they want to campaigns. Game over, we lose. I hope somebody kneecaps that piece of **** Chief Justice.

Yep. You're spot on here, dawg. This was the final nail in the coffin. We lose.

It will be interesting to see where the small money goes now that it's not just us wacko leftys that think Wall Street is a crooked game rigged by insiders. Do you see any opportunity for CUs out of all this, Z?

[blueballs]

Thanks blueballs....I'll take you up on that offer. Please check your PMs.

blueballs, that wouldn't be the stick-figure CMO power point would it?

I know the one you're referring to that made the rounds a couple of years ago. It was funny as crap and so true all at the same time!

[YoUDeeMan]

Thanks blueballs....I'll take you up on that offer. Please check your PMs.

Your firewall wouldn't let the e-mail through I just sent... it was kicked back.

Sorry about that. I provided another address.

Thanks!

[AZGrizFan]

blueballs, that wouldn't be the stick-figure CMO power point would it?

I know the one you're referring to that made the rounds a couple of years ago. It was funny as crap and so true all at the same time!

Fuck you!

No, fuck you!

[travelinman67]

I know the one you're referring to that made the rounds a couple of years ago. It was funny as crap and so true all at the same time!

Fuck you!

No, fuck you!

http://www.therealestatebloggers.com/20 ... ot-so-big/

"Lets drop in to see the Accountants..."

"...we want transparency..."

"Blow me."

[YoUDeeMan]

http://www.therealestatebloggers.com/20 ... ot-so-big/

"Lets drop in to see the Accountants..."

"...we want transparency..."

"Blow me."

That was a good one that has stood the test of time. OK, only a short time, but it will be funny for generations.

[AZGrizFan]

Yep. You're spot on here, dawg. This was the final nail in the coffin. We lose.

It will be interesting to see where the small money goes now that it's not just us wacko leftys that think Wall Street is a crooked game rigged by insiders. Do you see any opportunity for CUs out of all this, Z?

Sure. If there are any left after this mess. We're not eligible for ANY form of bailout money, so we've got to survive off of our reserves and capital. Once that's gone, we're kaput.

But for the ones that DO survive, we'll have a much cleaner reputation than banks, since we didn't make this mess and didn't partake in any of the bailouts.

[D1B]

It will be interesting to see where the small money goes now that it's not just us wacko leftys that think Wall Street is a crooked game rigged by insiders. Do you see any opportunity for CUs out of all this, Z?

Sure. If there are any left after this mess. We're not eligible for ANY form of bailout money, so we've got to survive off of our reserves and capital. Once that's gone, we're kaput.

But for the ones that DO survive, we'll have a much cleaner reputation than banks, since we didn't make this mess and didn't partake in any of the bailouts.

Nice. Good luck Z, I hope you make it. What a fucking travesty.

[JoltinJoe]

AZ, I just don't understand why someone who attempts to cultivate a solid FICO would do something stupid like walk away from outstanding debt knowing that it will wreck any future attempts to acquire either secured or unsecured debt. I mean, the rules haven't changed to your point, and if I walk away from a car loan, get my credit card balances negotiated down, or default on a mortgage my FICO gets reamed and I can't acquire any additional credit to buy more toys or necessities. It takes years to get a good credit score, but only a month or two to negate years of solid credit behavior. Maybe I'm not smart enough to play the game, but I figure if I borrow the money it's mine to repay.

8, I don't either.....but it's happening at never-before-seen rates. People see their same house for sale down the street at 60-70% of what they owe on theirs. They go get a mortgage, claim they'll be renting theirs, then walk away from it as soon as the other home closes. When gas was $4/gallon people with 800+ FICO's would go buy a Corolla, then turn in the keys to their Hummer when they weren't even late on their payment. If I had a dollar for every time I heard "yeah, I know, it'll drop my FICO by 100 points, but I'll still be above 650/680/700 etc"...I had a FICO in the 760 range for YEARS...hit a bump in the road about 2 years ago (for about a 3-month period)....my FICO STILL hasn't recovered (around 670 now, was as low as 610)...and I have NEVER not made a payment, never had any debt negotiated down, never turned in a car or a home. I've paid everything I signed my name too.

I guess (like houndawg) we're old fashioned in that regard....actually having personal accountability.

What a novel concept.

As someone who monitors his FICO score, I've observed something noteworthy in the past 1 1/2 years.

My FICO score has not changed much (gone up a little) but my overall percentage ranking has changed significantly -- several percentage points higher.

Historically solid FICO scores just not paying as predicted has got to be the cause.

I was speaking with an analyst about this walk-away mentality the other day. His prediction was that the big banks would, once everything settles, start offering loan programs for people with FICO scores damaged by a walkaway. His reasoning was that so many people are doing it who are otherwise reliable bill payers, that the market will have no alternative but to create lending programs for them.

And so it goes ...

[AZGrizFan]

As someone who monitors his FICO score, I've observed something noteworthy in the past 1 1/2 years.

My FICO score has not changed much (gone up a little) but my overall percentage ranking has changed significantly -- several percentage points higher.

Historically solid FICO scores just not paying as predicted has got to be the cause.

I was speaking with an analyst about this walk-away mentality the other day. His prediction was that the big banks would, once everything settles, start offering loan programs for people with FICO scores damaged by a walkaway. His reasoning was that so many people are doing it who are otherwise reliable bill payers, that the market will have no alternative but to create lending programs for them.

And so it goes ...

You're spot on, Joe...and there's 2 HUGE issues inherent with your statements:

1) The % ranking is changing because historically solid FICO's not paying as agreed is the cause...unfortunately, this new uncertainty and systemic risk that's now inherent in the system is NOT built into the rate structures at financial institutions. We're still doing car loans for 60 months @ 4.9% for FICO's of 720 and above, despite the fact that there's now about 5x as much risk in that group as there was 3 years ago. And the reasoning is this: With the collapse of the CMO/MBS market, there's NOWHERE ELSE to invest the members' deposits! The average 1 year CD is running about .8% right now....there's no WAY a financial institution can survive on that. It's why deposit rates have sunk to all-time lows in the last 24 months;

2) These programs already exist, and believe me, they're going to KILL us later. The credit union I inherited 13 months ago had an unsecured lending program they actually called the "Second Chance Loan"--small ($2,500 or less), unsecured loans made to credit-challenged people in an effort to help them "rebuild" their credit. Yeah. Needless to say, our chargeoff ratio on that $2.5 million portfolio is now about 30%. I recall back in the mid-90's when I was underwriting mortgages....in an 18 month span we had 57 clients (out of approximately 1800) apply at B of A for a mortgage who'd filed BK. Exactly ONE of those got approved, and that was because he could prove beyond a shadow of a doubt that it was totally and completely and ONLY a medical bankruptcy. In the mid-2000's if you'd filed BK and were applying for a mortgage, you just had to have reestablished credit with a couple department store cards, a gas card and a secured Visa and you could get a mortgage....oh, sure, you weren't going to get a 5% 30-year fixed like the "good" credit people, but you might have to pay 7.5%.....but you'd GET it--and usually with less than 3% down. It's a significant part of the reason we are where we are....

[blueballs]

In the mid-2000's if you'd filed BK and were applying for a mortgage, you just had to have reestablished credit with a couple department store cards, a gas card and a secured Visa and you could get a mortgage....oh, sure, you weren't going to get a 5% 30-year fixed like the "good" credit people, but you might have to pay 7.5%.....but you'd GET it--and usually with less than 3% down. It's a significant part of the reason we are where we are....

Don't forget the stated income or no income verification portion of the equation...

[AZGrizFan]

In the mid-2000's if you'd filed BK and were applying for a mortgage, you just had to have reestablished credit with a couple department store cards, a gas card and a secured Visa and you could get a mortgage....oh, sure, you weren't going to get a 5% 30-year fixed like the "good" credit people, but you might have to pay 7.5%.....but you'd GET it--and usually with less than 3% down. It's a significant part of the reason we are where we are....

Don't forget the stated income or no income verification portion of the equation...

Yep. Like pouring gasoline on a fire.

[Appaholic]

Don't forget the stated income or no income verification portion of the equation...

Yep. Like pouring gasoline on a fire.

That's what blows me away....& why I have little sympathy for the banks...seriously, no income verification?!?!?

[AZGrizFan]

Yep. Like pouring gasoline on a fire.

That's what blows me away....& why I have little sympathy for the banks...seriously, no income verification?!?!?

And since CU's weren't doing no-income loans, 40 year mortgages, negative amortization mortgages, etc...here's where CU's got fucked: banks & brokers doing these types of loans, packaging them and selling them, FNMA and FMC (or a private firm with an "insurance wrap" ) bundling them together as a CMO or MBS, and then selling THOSE on the secondary market as investment to credit unions.

[kalm]

That's what blows me away....& why I have little sympathy for the banks...seriously, no income verification?!?!?

And since CU's weren't doing no-income loans, 40 year mortgages, negative amortization mortgages, etc...here's where CU's got ****: banks & brokers doing these types of loans, packaging them and selling them, FNMA and FMC (or a private firm with an "insurance wrap" ) bundling them together as a CMO or MBS, and then selling THOSE on the secondary market as investment to credit unions.

You are greatly expanding your progressive credentials on this thread.

(and by progressive, I don't mean the co-opted pejorative modern term used by conservative mouth-breathers)

[bobbythekidd]

Hey AZ what kind of interest rates are you guys offering on a simple savings?

[AZGrizFan]

Hey AZ what kind of interest rates are you guys offering on a simple savings?

0.25%.

[Appaholic]

Hey AZ what kind of interest rates are you guys offering on a simple savings?

0.25%.

That blows....I'm getting 4.125% on Checking up to $25k from our credit union...

[AZGrizFan]

0.25%.

That blows....I'm getting 4.125% on Checking up to $25k from our credit union...

I'm guessing that 90% of the credit unions in your state aren't hemorrhaging cash like they are in AZ.

[houndawg]

That blows....I'm getting 4.125% on Checking up to $25k from our credit union...

I'm guessing that 90% of the credit unions in your state aren't hemorrhaging cash like they are in AZ.

Maybe you wouldn't be if you were offering something similar?

[bobbythekidd]

I'm guessing that 90% of the credit unions in your state aren't hemorrhaging cash like they are in AZ.

Maybe you wouldn't be if you were offering something similar?

He's a dick. He'd never even try it.

[AZGrizFan]

Maybe you wouldn't be if you were offering something similar?

He's a dick. He'd never even try it.

By "hemorrhaging cash" I mean "losing money" from loan losses. We HAVE to shrink to maintain a capital ratio above the mendoza line (5%).

[Skjellyfetti]

For some reason I read everyone of AZ's posts in the voice of Mr. Potter from It's A Wonderful Life.

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[houndawg]

Maybe you wouldn't be if you were offering something similar?

He's a dick. He'd never even try it.

It would be a good move to attract deposits. People want security now that the bubble has popped.

[blueballs]

[youtube][/youtube]

[youtube][/youtube]

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