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Reply #6: If they're relaxing the underwriting criteria [View All]

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dipsydoodle Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Apr-07-06 09:36 AM
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6. If they're relaxing the underwriting criteria
then chances are they've got a rising debt problem and the only only way of masking that from the primary fundors is to maintain the momentum of sales.

Doing that is like running with a brick tied to your neck with a long piece of elastic. It's fine while you keep running. Eventually they'll have to stop and then the lenders will pay the penalty.

The tragedy is that under those circumstances subsequent underwriting criteria , following the burst of the bubble, will become ultra tough.
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  -Regulators To Issue Mortgage Warning--WaPo Demeter  Apr-07-06 07:09 AM   #0 
  - Banks themselves are starting to tighten this stuff up  Warpy   Apr-07-06 07:12 AM   #1 
  - Wasn't that the big problem in the late twenties when the banks  0007   Apr-07-06 09:15 AM   #3 
     - It was, only they were lending money like crazy  Warpy   Apr-07-06 09:34 AM   #5 
  - 2/3 of all loans in 2005? Thats worrisome. n/t  Jim4Wes   Apr-07-06 07:50 AM   #2 
  - that's not a bubble-- it's a boil, and it needs to pop badly....  mike_c   Apr-07-06 09:16 AM   #4 
  - If they're relaxing the underwriting criteria  edwardlindy   Apr-07-06 09:36 AM   #6 
  - Talk about the horse being out of the barn  donkeyotay   Apr-07-06 10:55 AM   #7 
  - Banks required to increase their reserves  JPZenger   Apr-07-06 10:58 AM   #8 
  - The bubble needs to burst.  AX10   Apr-07-06 11:24 AM   #9 
  - Countrywide the largest lender  judaspriestess   Apr-07-06 11:30 AM   #10 
  - Countrywide pushes the hell out of those loans  maleficentia   Apr-08-06 09:08 AM   #18 
  - "...or people will buy less-expensive homes than they might otherwise."  Gman   Apr-07-06 12:19 PM   #11 
  - deregulating the financial industry  depakid   Apr-07-06 12:32 PM   #12 
  - as i understand it  melm00se   Apr-07-06 12:36 PM   #13 
  - I think you're basically correct, as I understand it. The risk of  coalition_unwilling   Apr-07-06 12:47 PM   #14 
  - traditionally tho  melm00se   Apr-07-06 02:32 PM   #17 
  - many secondary market investors  judaspriestess   Apr-07-06 01:04 PM   #15 
  - Excellent article  warrens   Apr-07-06 01:22 PM   #16 
  - A good marker  Sgent   Apr-08-06 12:37 PM   #19 
  - Bad news if you have $250,000 worth of paper secured with $60,000...  BiggJawn   Apr-08-06 12:46 PM   #20 
     - Except it's already-rich landlords that w/be buying those foreclosures and  cyberpj   Apr-08-06 12:54 PM   #21 
        - Wonder how much they'd rent for.  BiggJawn   Apr-08-06 01:22 PM   #22 
 

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