Skip to comments.A Mortgage Broker on Rapid Credit Rescores for Subprime Loans
Posted on 12/07/2011 1:41:21 PM PST by sheikdetailfeather
RUSH: Laurie, who can't say where she is. Is that right? She's worried about lawsuits, so she can't say where she is. Laurie, welcome to the EIB Network. You're worried about the lawsuits from what you're going to say here?
CALLER: Well, it's possible, Rush, and, by the way, it's an honor to speak to you.
RUSH: Thank you.
CALLER: I worked as both a packager and an advertising executive for a mortgage brokerage firm. I saw the rise and fall of the housing market and what infuriates me about when Obama speaks or Barney Frank or anyone else who talks about these mortgage-backed securities and everything that happened is that nobody knows the real truth about what goes on in the mortgage business and why it failed. It's not just people going to the bank, getting a loan, paying the bank back. You know, in the late nineties and early 2000s when real estate prices were sharply on the rise, you know, anywhere between '99 and '03 depending upon what part of the country you lived in, housing prices were on the rise dramatically, and there was a lot of pressure at Fannie and Freddie to get mortgages out the door.
(Excerpt) Read more at rushlimbaugh.com ...
She detailed the basic corruption and greed that sent the whole housing market and ultimately the economy down the twalet.
They just screwed the country into the ground. The TEA Party people had better keep the pressure on for hearings and trials. This is a crime, and people need to go sit with criminals
This woman should write a book, make videos, do whatever is necessary to get this info out.
This is definitely a blockbuster call! Rush will get a lot more info out of her very soon.
Rescoring explains a lot.
The programs at Fannie and Freddie and other agencies were put into place by Democrats during the Clinton Administration. The heads of these agencies were Democrats and friends of Clinton and Obama. The programs were kept secret. Nobody advertised that they were fraudulent.
When the Bush Administration attempted to shut this down Barney Frank and Maxine Waters and other Democrats attacked them over and over and prevented any reforms from being put into place. Only after Fannie Mae went bankrupt in early 2008 did any of the problems begin to be exposed.
The Bush Administration should have done more. But the active participants and the people who covered it up were Democrats(especially Barney Frank and the black caucus) and the MSM.
This is outrageous and all the people who didn’t default on their loans or buy houses they couldn’t afford saw the value of their homes cut in half and to top it all off they are paying for the bailouts of Fannie and Freddie and so will their children. Any investigative reporter could have found all this information but they won’t because then the democrats can’t use it as a club against Capitalism and the Republicans. And What kind of name is Fannie Mae anyway. Sounds like a door to door cosmetics sales company or a line of cooking utensils.
Not surprising at all. Just indicative of American culture in the 21st century. Its all spin and bending the rules to create the illusion of achieving your goals. The important thing is that you make your $$, get promoted, and get out while the getting is good. Who cares if it all comes crashing down tomorrow and to H@ll with anyone who gets hurt in the process. One big Potemkin village.
Wasn’t our current Attorney General some sort of big cheese at either Fannie or Freddie during this time?
OPPPSSS sorry thinking of the wrong guy....
Rush should have emphasized how the Bush Admin / Congress tried 17 times to real in Fannie and Freddie and the video is out their on "You Tube" of Maxine and Barney saying we have no problem.
One glaring hypocrisy that went unnoticed by many ( I thought of it eons ago ) mentioned today was the fact that the mortgages at the retail level were incentivized by sales commissions. Pure Capitalism yes, the hypocrisy is that is now verboten with our dear leader, you can't make money like that! But it was ok, when Dodd, Frank, Reins, Gorelick were all at the trough! But worse is, commissioned sales is ok with a fungible item, car, clothes etc, maybe even "stock" but we are talking a large maybe once in a life time purchase and once again like the 20's with 5% margin on stocks, they imparted a moral hazard, on the system even more so with changing someones credit score!
What is worse, Dodd / Frank did nothing to address the moral hazard of Fannie and Freddie and the CRDA...
Their used to be a real-estate talk show here in Michigan with Quicken Loan and they used to talk up these no doc, low doc, no interest loans etc. Well that show went away...... I can't get into the particulars, but I spent sometime in an arena where good advice and stewardship was paramount. These exotic mortgages never were mentioned....
I long for the days again when the local bank holds the paper and Fannie and Freddie have a steak drilled through their hearts...
"They" are "we".
We the electorate created this monster and allowed it to grow into what it has become.
FNMA and FHLMC started out as instruments to create liquidity for banks trying to hedge short-term liabilities, interest rate and credit risk against long-term assets.
There were once underwriting standards. Then, that disappeared due to political pressures. Soon (60+ years later), the disaster happened.
Don't blame "them". Blame "us".
I only spent 35 years in the business watching it evolve from a reasonable financial tool into an out-of-control social program.
I am partially to blame. You are, as well. Everybody who either voted or failed to vote over the past 40+ years created this.
“nd What kind of name is Fannie Mae anyway. Sounds like a door to door cosmetics sales company or a line of cooking utensils.”
FNMA. Federal National Mortgage Association
It’s an interesting call, but not entirely accurate. Unfortunately this sort of anecdotal material seems to be what Rush uses as ‘research’.
Laurie appears to believe that securitizing mortgages was something that Fannie & Freddie came up with between 1999 and 2003. In fact they had been securitizing mortgages since 1971 in the case of Freddie and 1980 in the case of Fannie.
And more significantly Laurie seems to be conflating the business model of investment banks during the bubble with that of Fannie & Freddie. Investment banks were extending warehouse lines of credit to mortgage brokers (she refers to them as wholesale lines of credit), and when that credit line was filled the IBs would take the mortgages and refill the credit line.
That part she has right. But she thinks that Fannie & Freddie then bought those loans and packaged them and sold them to the likes of Lehman Brothers. In fact F&F weren’t part of this loop at all.
The investment banks (which included Lehman Brothers) that extended the warehouses line of credit packaged and sold off the loans themselves, they had no need for Fannie & Freddie and in fact were rivals to F&F. During the bubble the private market mortgage securitizers cut deeply into Fannie and Freddie’s business, taking market share away from them.
So while Laurie does provide some insight into the world of mortgage brokers you have to be careful about taking her version at face value. I don’t think that she is trying to mislead anyone, I suspect that she is just a bit unclear about some aspects of the business that she didn’t handle herself.
BS, I had nothing to do with this. Didn’t know it was going on, and If you were in the business and saw it go down then YOU are to blame, don’t try passing it around.
Everybody with those characteristics is to blame.
I was already in the business when the Community Reinvestment Act was proposed, became law and was implemented.
Nobody in the industry at the time liked it, because we all knew where it would lead.
Sure enough........here we are.
If you want to match wits with me on this issue, please feel free.
So your a mortgage broker, knew the deal, for who knows how many years, but every body was doing it, and made tons of cash, and now you have a conscience. But your trying to find away around it.
Sounds like a pornographer who shot a 16 yr old and feels bad.
You, and your peeps were, and still are the problem, You and your people happily pocketed loads of cash, blame others for your... because others involved in their careers were not standing over you making sure you were trying to do the right thing.
Your thinking is working
I was a mortgage banker, not a mortgage broker. There is a difference. I nearly always declined deals brought in by mortgage brokers.