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Fri Oct 26, 2018, 09:47 PM

Why would a big bank like Wells Fargo

give a home equity loan to a widow in the amount of $484,000 for a property valued at $235,000?

(I got the numbers from a filed mortgage and a call to the tax assessor.)

10 replies, 2219 views

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Always highlight: 10 newest replies | Replies posted after I mark a forum
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Arrow 10 replies Author Time Post
Reply Why would a big bank like Wells Fargo (Original post)
no_hypocrisy Oct 2018 OP
lapfog_1 Oct 2018 #1
no_hypocrisy Oct 2018 #5
PoindexterOglethorpe Oct 2018 #8
lapfog_1 Oct 2018 #9
dameatball Oct 2018 #2
unblock Oct 2018 #3
PoliticAverse Oct 2018 #4
no_hypocrisy Oct 2018 #6
Socal31 Oct 2018 #7
no_hypocrisy Oct 2018 #10

Response to no_hypocrisy (Original post)

Fri Oct 26, 2018, 09:49 PM

1. when was the loan originated?

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Response to lapfog_1 (Reply #1)

Fri Oct 26, 2018, 10:03 PM

5. 2008 just before "The Crash"

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Response to no_hypocrisy (Reply #5)

Fri Oct 26, 2018, 10:08 PM

8. That says it all .

Before the crash lots of banks were routinely giving loans well in excess of the property value. They were also giving loans to people who had no demonstrable ability to repay them.

While I think the banks and mortgage companies should bear the lion's share of the blame, the borrowers also should have been paying attention to what was being loaned and so on.

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Response to PoindexterOglethorpe (Reply #8)

Fri Oct 26, 2018, 10:21 PM

9. yup... hence the question... and that's the explanation.

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Response to no_hypocrisy (Original post)

Fri Oct 26, 2018, 09:55 PM

2. Did she once pee on a bed in Moscow? Only explanation I can think of.

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Response to no_hypocrisy (Original post)

Fri Oct 26, 2018, 09:55 PM

3. Appraised value and assessed value can be very different

In some places assessed value is a fraction of market value, where I live i think it's 70% but it could be lower in other places.

Then there are timing differences, the assessed value could be based on when the market in the area was terrible compared to when the appraised value was.

Then, a loan could be based in part on intended improvements that wouldn't go into an assessment yet.

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Response to no_hypocrisy (Original post)

Fri Oct 26, 2018, 09:56 PM

4. Did someone involved get a commission based on the amount of the loan? n/t

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Response to PoliticAverse (Reply #4)

Fri Oct 26, 2018, 10:03 PM

6. Don't know. Only have the actual document.

Probably.

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Response to no_hypocrisy (Original post)

Fri Oct 26, 2018, 10:05 PM

7. The assessed value has nothing to do with current market.

The maximum CLTV for HELOCS is generally 80%.

Commission on HELOCs for the LO is almost nothing.

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Response to no_hypocrisy (Original post)

Fri Oct 26, 2018, 10:21 PM

10. OK, for those of you who make a good argument about assessed and market values

here are some current market values for the property:

$320,000 Zillow
$345,000 Redfin
$341,000 ReMax


Still $140,000 or so more on the mortgage than the market value. It's a dinky house built in 1940 in a dinky little town.

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