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#1
Just informing some people on how the economy is heading in the near future, with my current profession being a mortgage broker.
If any of you guys ever get the chance watch the Mr.Mortgage videos on youtube, which I will link up here in another post. He gives great insight on products that big time investors used to offer which are similar to sub-prime loans.
These loan products were called ALT-A products which were for mid-tier credit people to good credit people. All being along the same lines as sub-prime loans, with the teaser rates of arms. One of the main differences were that the arms, were a little bit longer maybe for 5 years or 7 years, but still many were 2-3 years arms also. With the declining values of homes, the main torture of the economy, which has caused millions of sub primes loans to go bad, the ALT-A products are going to be the next to come due. This is going to be the Alt-A crisis now. No values, equals upside down people in the same boat as sub-prime people. In the video you will see that their are millions of these ALT-A loans that still need to come due. With millions of investors having these loans still stacked in their books, a positive economy turn around looks no where to be seen in the near future. The video will explain a company called Aurora which was a Lehman investor. I use to use this company and the loan products they were offering were just insane. I could get anyone approved with their services.
This ALT-A crisis, doesn't even include the people in pay-option arms which are still being used to this day. These loans offer a low rate were you don't have to pay the full balance of interest nor principal. The remaining balance each month gets tacked on to your overall loan balance. Now just imagine someone upside down and increasing their overall balance each month. I know Wachovia is still training people to this day to sell these types of loans. The investor gives 2 and a half % in the back that the customer never sees on these loans. So all the LO's are making a killing of selling these loans. I personally have never sold these loans, but talk to people everyday who are now stuck in them. It is OK if the client knows how to use the loan properly, but in most cases the client is completely blind to what is going on.
ALT-A is still around, but the guidelines have changed a great deal. With all these loans coming due here in the near future, our economy is not looking so bright anytime soon. Kinda scary actually.
If any of you guys ever get the chance watch the Mr.Mortgage videos on youtube, which I will link up here in another post. He gives great insight on products that big time investors used to offer which are similar to sub-prime loans.
These loan products were called ALT-A products which were for mid-tier credit people to good credit people. All being along the same lines as sub-prime loans, with the teaser rates of arms. One of the main differences were that the arms, were a little bit longer maybe for 5 years or 7 years, but still many were 2-3 years arms also. With the declining values of homes, the main torture of the economy, which has caused millions of sub primes loans to go bad, the ALT-A products are going to be the next to come due. This is going to be the Alt-A crisis now. No values, equals upside down people in the same boat as sub-prime people. In the video you will see that their are millions of these ALT-A loans that still need to come due. With millions of investors having these loans still stacked in their books, a positive economy turn around looks no where to be seen in the near future. The video will explain a company called Aurora which was a Lehman investor. I use to use this company and the loan products they were offering were just insane. I could get anyone approved with their services.
This ALT-A crisis, doesn't even include the people in pay-option arms which are still being used to this day. These loans offer a low rate were you don't have to pay the full balance of interest nor principal. The remaining balance each month gets tacked on to your overall loan balance. Now just imagine someone upside down and increasing their overall balance each month. I know Wachovia is still training people to this day to sell these types of loans. The investor gives 2 and a half % in the back that the customer never sees on these loans. So all the LO's are making a killing of selling these loans. I personally have never sold these loans, but talk to people everyday who are now stuck in them. It is OK if the client knows how to use the loan properly, but in most cases the client is completely blind to what is going on.
ALT-A is still around, but the guidelines have changed a great deal. With all these loans coming due here in the near future, our economy is not looking so bright anytime soon. Kinda scary actually.
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