What Could Possibly Go Wrong?

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Kevin Williamson: We've just legalized mortgage fraud.

Under its new and cynically misnamed "HomeReady" program, borrowers with subprime credit don't need to show that they have enough income to qualify for the mortgage they're after -- they simply have to show that all the people residing in their household put together have enough income to qualify for that mortgage. We're not talking just about husbands and wives here, but any group of people who happen to share a roof and a mailing address. And some non-residents can be added, too, such as your parents.

That would be one thing if all these people were applying for a mortgage together, and were jointly on the hook for the mortgage payments. But that isn't the case. HomeReady will permit borrowers to claim other people's income for the purpose for qualifying for a mortgage, but will not give mortgage lenders any actual claim against that additional income.

This is madness.


33 Comments

This? This isn't madness.

THIS IS SPARTA!!!!

(And we're all gonna end up the same way Leonidas did at Thermopolae too! )Only with an uglier corpse to show for it of course...))

Tailor made for a large group of immigrants to pool their resources for a house. They just created a new form of ghettoization. Wow LOL

Sub-prime mortgage scam redux.
Let's hope the lenders don't fall for this - or will refusing to participate in this scam label the bank ''racist''?

Lenders should just keep saying "NO WAY, Jose and Shaniqua and Pablo and Dineisha and Ricardo and Keshaun and y'all!" to these applicants until their tongues bleed. Simply do not approve the applications - crisis averted.

Wall Street will figure out how to make a buck off this and pass of the risk to people who believe in to good to be true stories. And then when it all fails it will be blamed on Bush or the bankers whichever low information types will swallow that particular day.

Well, don't forget the original pressure on banks via the Community Reinvestment Act came from the fed refusing to permit mergers or the development of new financial instruments if banks didn't go along with the subprime BS.

Since Obama bragged about threatening to sue banks which refused to bankroll bad credit risks in the sub-prime mortgage debacle for "racism" prior to his becoming president, I'm sure it will be the case once again that any lending institution refusing to participate in Son of Sub-Prime Meltdown will be in for the same treatment. Zimbabwe is starting to look like a good investment.

Dens at the helm, steering for the rocks

Well, leftist declared banks and bankers (bankster) are evil because they expect you to pay money you borrow back. So... leftists will make new laws to allow you to borrow and not pay them back.

After all if government can do it, why not the individual Social justice warrior.

I've seen this movie before. We've all seen this movie before. It starts off as a romantic comedy and ends up as a horror flick, with the axe murderer driving off into the sunset.

Canada has recently tightened up its mortgage requirements. I hope it continues to do so. The looser the U.S. is, the tighter Canada must be to weather the inevitable storms.

Will lenders who don't play be charged with racism? Certainly, but if all the lenders push back on this criminal stupidity with flurries of lawsuits, they could stop it. Needs a rare combination of brains and guts, though.

It's not madness. It's hope and change; change mortgage rules and hope nothing implodes.

Those who cannot remember the past are condemned to repeat it.
- George Santayana

Famous quote but dead wrong. Whether or not you remember the past you're gonna repeat it.

My daughter told me about this over the Christmas holiday:

Freud' s theory of Repetition compulsion. Repetition compulsion is a psychological phenomenon in which a person repeats a traumatic event or its circumstances over and over again. This includes reenacting the event or putting oneself in situations where the event is likely to happen again.

I guess they have forgotten who changed the rules that started the last mortgage mess.I guess Bill will be looking for another cigar if he gets to move into the Whitehouse. After all don't you know he is charming.

well 99, that theory applies to individuals, the dems are a collective. U do know the difference don't you

β€œIn Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $724,000.”
― Michael Lewis, The Big Short: Inside the Doomsday Machine

"It's like deja-vu, all over again." - Yogi Berra

What? Again?

Banks will lend. When there is a default bank will go to government. Tax payer will bail out bank. Again.

And this will cause an economic crash once a conservative President is elected.

Then he will be blamed for the crash by the main stream lying media.

deja vu again.

whew !!! for a moment there I thought the posting referred to Canadian mtg rules.

my thought was, oh, how quickly the lieberals are undoing things . . . .

thank you Jim Flaherty wherever you are.

is it true the democraps threatened to SUE the lenders if they didn't cough up the funds?

isn't that the kind of thing mobsters do?

I had to read this twice.

It's unbelievable how people find ways to screw themselves and others.

I guess they learned nothing from the last housing crisis.

"This is madness."

This is a re-run. Sub-prime is sub-prime and the mortgages differ not in the least.
The borrower cannot pay what they borrowed in any case.

If you do own your home free and clear, make sure to get an official bank statement to that effect. It could save you a lot of grief when someone tries to sell your home out from under you. In the aftermath of the original sub-prime tranches, it was not widely known that the mortgages were sold around to investors in these tranches so much that the true owner of the real estate asset was hard to legally determine.

It's been tried(selling mortgages that were already paid in full) and in some cases has succeeded by unscrupulous individuals, because the true home owner did not having an official document proving the mortgage was paid in full.

Yes, they're preparing for a Republican POTUS as well as a GOP controlled Congress, so when the roof caves in (again) they'll have their scapegoats. Any effort to unwind this before it implodes could itself send a sufficient shockwave to cause the same thing. With the ME and Europe going to sh!t at the same time, some (un)lucky bastard's going to have one big mess on his/her hands.

Here we go again. It works so well last time, why not try it again? Who cares what happens down the road, just as long as it helps our candidate get elected.

Everything that Kevin Williamson writes is worthy of your attention.

This is how it all started.

this does not even qualify as econ 101.

So, we all know who this new "program" is supposed to help (more vote buying, a la "Obamaphone lady")

I wonder if food stamps are considered income?

You don't make money by building stuff anymore. You make money flipping houses. The harder you flip them, the more money you make.

In Canada, the -only- way an average non-genius can make money is flipping houses. Buy, spiff, flip. Rinse, repeat. Because house flipping is the only place money is made where the government doesn't take half.

USA likewise. Except where we have 30 million people, they have 300 million. Re-inflating the bubble gets all those low information moron voters back to work in the housing industry. That's a big deal.

It's a short term scam, sure. But Barry is only going to be Prezzy for one more year, and he does not give a sh1t what happens next January after he leaves. If it works for 12 months it's good enough.

Look for the same thing from the Liberals soon enough, if their poll numbers tank and there's an election coming.

Who do these Fannie guys think they are....a Yankee version of Canada's Farm Credit Corporation, or something like that?

How the LEFT has been able to completely erase the culpability of Dodd, Frank and the Democrat controlled Senate Banking Committee in the entire Real Estate credit bubble is a Jedi mind trick that even exceeds the Global Watming mind Trick. How the LEFT has been able to demonize Wall Street and Banks and not the rotten Socialist policy of "home ownership for all" ... at the expense of every other hard-working mortgage payer ... is simply beyond my understanding. We have bred an entire society of ignoramuses. Low information Lemmings that keep herding over the same cliff ... repeatedly.

No, it's not "deja vu".

The entire Oblahblah presidency has been "vuja de" ...nobody has EVER seen anything THIS insane EVER before ... and hopefully we won't ever have to endure it again after Trump and/or Cruz win this November.

"The kind of thing that mobsters do" ...

That's why Obama's crew of Commies and Black Supremacists is known as The Chicago Mob.

Seems the whole country has become The Mob -vs- The Common Man.

God help the rest of us.

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Recent Comments

  • A_Nonny_Mouse: "The kind of thing that mobsters do" ... That's why read more
  • Davers6: No, it's not "deja vu". The entire Oblahblah presidency has read more
  • Kenji: How the LEFT has been able to completely erase the read more
  • Jamie MacMaster: Who do these Fannie guys think they are....a Yankee version read more
  • The Phantom: You don't make money by building stuff anymore. You make read more
  • JamesHalifax: So, we all know who this new "program" is supposed read more
  • old white guy: this does not even qualify as econ 101. read more
  • Robert of Ottawa: This is how it all started. read more
  • peter o'keefe: Everything that Kevin Williamson writes is worthy of your attention. read more
  • Dirtman: Here we go again. It works so well last time, read more