Subprime Lenders At Work
When these chickens come home to roost, I would not want to be holding CDO, MREIT or MBS based on these subprime loans. Thank goodness foreign investors have bought alot of them.
"They really are all about making the dollar and dealing with the consequences later." Deceiving borrowers about the terms of their loans, forging documents, falsifying appraisals and fabricating borrowers' income to qualify them for loans they couldn't afford.
Staffers allegedly fabricating borrowers' income and falsifying appraisals to make loans go through. Resoliciting customers within two years encouraging "flipping," or pushing new loans simply to generate fees and commissions.
Appraisers in six states said in interviews that the subprime lender had tried to bulldoze them into inflating home values and, in some cases, lying about property defects.
Frequently abusing the company's "stated income" loan program, which requires only a letter from the borrower declaring how much he or she makes. Borrowers were told what their income had to be to qualify, these ex-workers said, and they were often coached to invent fictitious side jobs, such as home-based computer consulting, to hit the mark.
Nearly one out of every six Ameriquest mortgages sold to Wall Street investors in 2004 was a stated-income loan.
John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, sees the housing industry creating its own problems as mortgage lenders struggle to meet sales targets elevated by past record years.``We just don't have the same pent-up demand for housing anymore,'' Silvia said before the report.
``As a result, lenders are turning to less-qualified borrowers to hit their revenue targets. In the short run, you hit your targets, but over the next two or three years delinquency rates are going to go up.''
http://www.latimes.com/business/la-fi-ameriquest4feb04,1,6877976.story?coll=la-headlines-business&ctrack=1&cset=true
"They really are all about making the dollar and dealing with the consequences later." Deceiving borrowers about the terms of their loans, forging documents, falsifying appraisals and fabricating borrowers' income to qualify them for loans they couldn't afford.
Staffers allegedly fabricating borrowers' income and falsifying appraisals to make loans go through. Resoliciting customers within two years encouraging "flipping," or pushing new loans simply to generate fees and commissions.
Appraisers in six states said in interviews that the subprime lender had tried to bulldoze them into inflating home values and, in some cases, lying about property defects.
Frequently abusing the company's "stated income" loan program, which requires only a letter from the borrower declaring how much he or she makes. Borrowers were told what their income had to be to qualify, these ex-workers said, and they were often coached to invent fictitious side jobs, such as home-based computer consulting, to hit the mark.
Nearly one out of every six Ameriquest mortgages sold to Wall Street investors in 2004 was a stated-income loan.
John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, sees the housing industry creating its own problems as mortgage lenders struggle to meet sales targets elevated by past record years.``We just don't have the same pent-up demand for housing anymore,'' Silvia said before the report.
``As a result, lenders are turning to less-qualified borrowers to hit their revenue targets. In the short run, you hit your targets, but over the next two or three years delinquency rates are going to go up.''
http://www.latimes.com/business/la-fi-ameriquest4feb04,1,6877976.story?coll=la-headlines-business&ctrack=1&cset=true
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