Are Banks Still Lending?

[MODE ROGUE]

Originally Posted by Oblivian

I find this statement odd. How many properties does Wells Fargo own currently in Florida?

Why look at how many loans they own? Every huge bank in America (Citi, Wells, BOA, etc.) has major paper in the state. What you need to look at is the processing trend over the last 2 years and their statistics on denied applications.

Guess which way the little arrow is headed, for Wells or any bank for that matter.?.?

[Oblivian]

Originally Posted by MODE ROGUE

Florida is more “the norm” because home sales and lending trends in this state are consistent with what is happening throughout the country. Hence…. the lending/real estate crisis.

I'm telling you, Florida (particularly Miami) is the EXTREME. Indiana is far more in the middle than Florida. We are experiencing the crisis as well.

Originally Posted by MODE ROGUE

uhmmm…. He said the days of NO MONEY DOWN are gone. He is correct. He did not say 95% conventional loans are gone.

Maybe I need to bold it for you.

Originally Posted by Nietzsche13

What the banks are doing is raising the down payment requirement. The days of no money down are gone forever. You will need 20% for now on plus great credit.

Originally Posted by MODE ROGUE

Let me try this one more time. The issue is not whether or not 95% conventional loans are taking place or higher down payment requirements are coming up. Everyone is aware of BOTH. The issue is how many people are actually being approved for loans, period. ANY loans. Lending guidelines have tightened up everywhere. Anyone who denies that is living in cave or simply has no idea of what’s going on in the lending industry. Therefore, understanding that lending guidelines have become much stricter obviously translates to understanding that the # of loans being processed is in a significant downward spiral.

Again, I've given specific examples of people that shouldn't be approved for loans that are. Lending guidelines have tightened up, but they aren't nearly as tight as everyone is making it out to be. I can pull files and give credit scores tomorrow. I believe it will get tighter in the next few months though.
You can argue and speculate all you want, but I am giving you FACTS. I can pull files from national banks who are still lending.

[MODE ROGUE]

Originally Posted by jerrylundergard

Yo dog, as a fellow from miami I completely understand why these banks wouldnt loan to anyone. This fucking place is a total disaster. The prices have shot up around here and are still through the roof. Everyone here is trying to sell but noone is buying. Its almost funny driving around and all the 4sale signs. These banks are smart as hell to avoid lending in this environment. Home prices here in dade fell what, 20 percent last year? They are expected to do the same this year too. Hell, I wouldnt buy next year either. This market still has a home surplus of what, 4 years? This place should be avoided at all costs right now as prices are guaranteed to drop. I wouldnt touch this market till prices are nearing 2000 levels. 140k was the median in 2000, 160k in 2001,185k in 2002, 225k in 2003, 275k in 2004, 350k in 2005, 375k in 2006, 272k in 2007. This place went fucking nuts man! Miami has one of the lowest pay rates in the country. These immigrants cant afford this place and I love the implosion. Those kind of increases without corelating increases in salary should of been a big alert to everyone.

I’m with you and that’s the point. The environment & trend you described is taking place throughout the majority of the country at varying levels. It’s not a Dade or Florida issue. It’s a national issue by & large.

[Nietzsche13]

Originally Posted by Gotti McCarran

Stop leaning on others dude. IF THEY GET CLOUD ON THE INTERNET AND APPEARANCES ON TV THEY ARE EITHER FAKE OPPOSITION OR PSYOPS. If you learn something from 9/11, than it would be that there is nobody giving you the truth out there that ever gets popular. The biggest con artists and fakers, the biggest posers, they get the traffic, the mention the name and they bury their ideas deep for everyone to see on the media.

So I suggest if I do look through this look for gate keeping. Look for the big lie that gets protected by any means. See, Ron Paul is controlled as well. If I had any doubt about this it ended during his campaign. It as ridiculous how big his support and donations were and what he managed to do with it. When he decided for tactical reasons to let the media completely crash his campaign while standing by doing nothing, this was when I became 100% sure that was his job.

They tell you the truth for as long as it takes for you to gain trust and they do this simply to sink the big lie that needs to be protected or sometimes to channel your anger into a harmless path they control.

They are not the Jews, the Zionist, the Jesuits, the Neo-Cons or whatever little part of the bigger picture crazy people blame this on. It's a well organized powerful shadow government consisting of the CFR, Trilateral Commission and Bilderberg that really runs things and they give a fuck about all the superficial divisions they give us to rule us. They are black Democrats, Japanese Republicans, German farmers,.....,anything....as long as you're rich, influential and you lie your ass of to support the course, mainly centralizing all power in their hands.

It's real and people need to understand this has nothing to do with alien conspiracies, it's about making money and getting power, very real things.

I'm not sure what you are getting at here dude.

Wht you need to know is that the people on the hook are those who insured sub-prime loans to the tune of $500 trillion.

Here is what happened. Back when the market was booming (2003-2005), banks and other institutions were selling those loans in massive bundles to other investors. When they sold the mortaga backed securitites they also offered an insurance policy on the investment. They were guaranteeing the investment for a fee. This is the credit default swap issue. Why not? The prices of himes were going up like crazy so what's the risk to the issuer. In the event of foreclosure, the homes as collateral would cover the investment. Since this aspect of the market was de-regulated, torms that issued and sold this insurance did not have any reserve requirements. When you sell life insurance, for instance, a company is required to have adequate asstes to cover the future cash outlays. In this case, there was NOTHING to back potntial losses in mortages.

SO the housing market tanked and guess what? All the institutions that sold these credit defaul swaps are on the hook to cover the losses. They insured the investments and made huge profits when they did. Accounting techniques led to the realization of immediate profiits when these instruments were sold (bonuses kicking in), but did not show the liability because how do you value real estate in real time.

Here lies the problem. All of the institutions who sold these instruments now have an obligation to pay up and they do not have the money. It is estimated that the liability is $500 trillion. If the real estate market recovers, foreclosures stop, and the prices of homes returns to the boom levels everything will be fine. If the market continues to tank, foreclosures rise, and prices continue to drop, its all over.

I don't think there is $500 trillion in this world to cover the gambling debts of these people. They made these bets without any assests to back it up. They thought it was a no brainer with little risk and they were wrong. And now they are looking for a way out. There isn't one.

This is what is going on. This is the big issue. Powerful people are on the hook and they are finished. Anyone who sold credit default swaps is a goner. When they cannot pay, it will trickle down to those who hold the mortage securities. Then they will lose too.

Meltdown.

[MODE ROGUE]

Originally Posted by Oblivian

We are experiencing the crisis as well.

Thank you.

Originally Posted by Oblivian

Maybe I need to bold it for you.

I don’t know how well you know that poster but if you think the he believes the ONLY way to get a loan today is to put 20% down, you are sadly mistaken. Especially as he’s observed several people in this thread, who live & breathe the business, say that conventional loans with lower down payment requirements have not been vanquished. That dude is bright and you don’t give him enough credit (no pun intended).

Originally Posted by Oblivian

Again, I've given specific examples of people that shouldn't be approved for loans that are. Lending guidelines have tightened up, but they aren't nearly as tight as everyone is making it out to be. I can pull files and give credit scores tomorrow. I believe it will get tighter in the next few months though.
You can argue and speculate all you want, but I am giving you FACTS. I can pull files from national banks who are still lending.

Really, you can pull files? LOL. C’mon man, I’ve owned my own brokerage for years. Once again, WHO THE HELL IS SAYING THAT BANKS ARE NOT LENDING ? The dead horse that continues being punched in the mouth here is that banks are lending LESS. They’re making it harder (which you have acknowledged) and they’re lending less (which every national statistic on the planet supports). Unless you disagree with that, we have nothing else to talk about.

[Nietzsche13]

Thanks for the support Mode Rogue. I'm out of the business now, but I still know what is going on in real estate.

I'd like to know what you think of my last post. I'm more interested in the big picture right now. The word on closing deals is that the financial aspect is much more difficult than having a meeting of the minds. Its very frustrating when you actually have a buyer who is ready, willing and able and the only thing separating you from completing a transaction is the financing.

[KidBaize]

Originally Posted by takeahnase

So on the one hand you want to get rid of banking (by introducing 100% reserve requirements) and at the same time you are critical of OTC trading/lending?

I was going to let this go but you seem to like my posts so...


Full reserve banking is a different model than what we have today but there's no reason why it won't work. Banks would lend out of paid-in capital and retained earnings only. If investors don't want to put their savings at risk, then there's little lending. Lending would become much more sensitive to the underlying fundamentals of the economy. Of course I'm talking about a system with a stable money supply where the market sets the interest rate.

I realize it won't work in our present credit-based system -- in fact it would destroy it -- however I merely want to point out an alternative to what we have today. Having said that, there's no reason reserve requirements can't be raised from the present 10% level. If excessive credit creation and leverage led us to this point, the obvious solution would seem to be more conservative banking practices.


My criticism of the derivative markets has to do with excessive leverage. I'm a fiscal conservative and think the risks created in structured finance far outweigh the benefits.

[MODE ROGUE]

Originally Posted by Nietzsche13

Thanks for the support Mode Rogue. I'm out of the business now, but I still know what is going on in real estate.

I'd like to know what you think of my last post. I'm more interested in the big picture right now. The word on closing deals is that the financial aspect is much more difficult than having a meeting of the minds. Its very frustrating when you actually have a buyer who is ready, willing and able and the only thing separating you from completing a transaction is the financing.

Your assessment was solid. I certainly don’t know the answer, from a big picture perspective, but I think it’s obvious that everything starts with putting a halt to foreclosures. Personally, my business is transitioning from lending to loan modification. It’s “smaller margin” but HUGE demand & quantity. Initiatives like loan mods will go a long way in curving foreclosures. Once we get our arms around foreclosures, banks will loosen up and gradually crawl out of the panic mode that has attributed to some of the significant changes we’ve seen in guidelines today. I have to reiterate, there is R.E. demand out there. More than is reported or people generally know. Buyers are waiting for the bottom to fall out. I think we’re close. Once that threshold is reached, guidelines will move closer to center, prices will finally stabilize and purchasing statistics will trend in the opposite direction.

I hope.

[Nietzsche13]

To bottom or not to bottom, that is the question.

How low can low go?

And what happens to all the properties that are worth less than the leins on them?

[MODE ROGUE]

Originally Posted by Nietzsche13

And what happens to all the properties that are worth less than the leins on them?

The Government Housing & Economic Recovery Act