Dachsie
28th April 2017, 08:33 AM
A little comic relief when I heard jsnip4 say all you have to do to get a home loan when you have rotten credit is to say you will take a "government financial management class." And the absurdity that people with almost no income and no job (NINJA) can just lie and actually get a better interest rate than well qualified people with good income and credit rating.
As in 2008, the people losing their jobs and being sent in to poverty are tellers and low-level staff, not the fat cat investment bankers with their huge bonuses and crooked Wall Street wheeling and dealing.
As for predatory lending and all that jazz, fraudulent and irresponsible behavior is REWARDED, so is repeated.
____________
https://www.youtube.com/watch?v=gpGrMP9vwRk
REALIST NEWS - Bank Of America Firing Thousands & Subprime Mortgages Are Back
jsnip4
Published on Jun 17, 2016
_______
http://www.zerohedge.com/news/2016-06-15/bank-america-set-fire-8000-banker-layoffs-accelerate
Bank Of America Set To Fire 8,000 As Banker Layoffs Accelerate
by Tyler Durden
Jun 15, 2016 1:45 PM
A few months ago we pointed out that mass layoffs were coming for bankers due to declining revenues and more difficult market conditions, and now we're seeing the first major wave of that come to fruition.
Bank of America has announced that it will fire as many as 8,000 employees within its consumer division the FT reports.The core reason given for the headcount reduction in this instance is that digital banking is picking up the pace, and has reduced the need for "back office staff" and bank tellers.
This is a trend that BofA highlighted in its In its Q1 earnings press release, as the bank showed that mobile banking users had shot up 15% y/y.
The bank has already slashed headcount by more than 10,000 in 2015, and has cut almost 40,000 from its consumer division alone since 2009 (bringing the total at the end of Q1 to 68,400). The layoffs are in line with what has been happening to its retail branch count, which has fallen by about 1,400 over the past seven years. Thong Nguyen, president of retail banking told a conference in New York this week that the numbers would "probably go down to the low 60s", implying as many as 8,000 layoffs are on the horizon..."
SNIP
________________
http://www.zerohedge.com/news/2016-06-15/subprime-mortgage-back-its-2008-all-over-again
The Subprime Mortgage Is Back: It's 2008 All Over Again!
by Tyler Durden
Jun 15, 2016 1:25 PM
Submitted by Simon Black via SovereignMan.com,
Apparently the biggest banks in the US didn’t learn their lesson the first time around...
Because a few days ago, Wells Fargo, Bank of America, and many of the usual suspects made a stunning announcement that they would start making crappy subprime loans once again!
I’m sure you remember how this all blew up back in 2008.
Banks spent years making the most insane loans imaginable, giving no-money-down mortgages to people with bad credit, and intentionally doing almost zero due diligence on their borrowers.
With the infamous “stated income” loans, a borrower could qualify for a loan by simply writing down his/her income on the loan application, without having to show any proof whatsoever.
Fraud was rampant. If you wanted to qualify for a $500,000 mortgage, all you had to do was tell your banker that you made $1 million per year. Simple. They didn’t ask, and you didn’t have to prove it.
Fast forward eight years and the banks are dusting off the old playbook once again.
Here’s the skinny: through these special new loan programs, borrowers are able to obtain a mortgage with just 3% down.
Now, 3% isn’t as magical as 0% down, but just wait ‘til you hear the rest.
At Wells Fargo, borrowers who have almost no savings for a down payment can actually qualify for a LOWER interest rate as long as you go to some silly government-sponsored personal finance class.
I looked at the interest rates: today, Wells Fargo is offering the exact same interest rate of 3.75% on a 30-year fixed rate, whether you have bad credit and put down 3%, or have great credit and put down 30%.
But if you put down 3% and take the government’s personal finance class, they’ll shave an eighth of a percent off the interest rate.
In other words, if you are a creditworthy borrower with ample savings and a hefty down payment, you will actually end up getting penalized with a HIGHER interest rate.
The banks have also drastically lowered their credit guidelines as well… so if you have bad credit, or difficulty demonstrating any credit at all, they’re now willing to accept documentation from “nontraditional sources”.
In its heroic effort to lead this gaggle of madness, Bank of America’s subprime loan program actually requires you to prove that your income is below-average in order to qualify.
Think about that again: this bank is making home loans with just 3% down (because, of course, housing prices always go up) to borrowers with bad credit who MUST PROVE that their income is below average.
[As an aside, it’s amazing to see banks actively competing for consumers with bad credit and minimal savings… apparently this market of subprime borrowers is extremely large, another depressing sign of how rapidly the American Middle Class is vanishing.]
Now, here’s the craziest part: the US government is in on the scam.
The federal housing agencies, specifically Fannie Mae, are all set up to buy these subprime loans from the banks.
Wells Fargo even puts this on its website: “Wells Fargo will service the loans, but Fannie Mae will buy them.” Hilarious.
They might as well say, “Wells Fargo will make the profit, but the taxpayer will assume the risk.”
Because that’s precisely what happens.
The banks rake in fees when they close the loan, then book another small profit when they flip the loan to the government.
This essentially takes the risk off the shoulders of the banks and puts it right onto the shoulders of where it always ends up: you. The consumer. The depositor. The TAXPAYER.
You would be forgiven for mistaking these loan programs as a sign of dementia… because ALL the parties involved are wading right back into the same gigantic, shark-infested ocean of risk that nearly brought down the financial system in 2008.
Except last time around the US government ‘only’ had a debt level of $9 trillion. Today it’s more than double that amount at $19.2 trillion, well over 100% of GDP.
In 2008 the Federal Reserve actually had the capacity to rapidly expand its balance sheet and slash interest rates.
Today interest rates are barely above zero, and the Fed is technically insolvent.
Back in 2008 they were at least able to -just barely- prevent an all-out collapse.
This time around the government, central bank, and FDIC are all out of ammunition to fight another crisis. The math is pretty simple.
Look, this isn’t any cause for alarm or panic. No one makes good decisions when they’re emotional.
But it is important to look at objective data and recognize that the colossal stupidity in the banking system never ends.
So ask yourself, rationally, is it worth tying up 100% of your savings in a banking system that routinely gambles away your deposits with such wanton irresponsibility…
… especially when they’re only paying you 0.1% interest anyhow. What’s the point?
There are so many other options available to store your wealth. Physical cash. Precious metals. Conservative foreign banks located in solvent jurisdictions with minimal debt.
You can generate safe returns through peer-to-peer arrangements, earning up as much as 12% on secured loans.
(In comparison, your savings account is nothing more than an unsecured loan you make to your banker, for which you are paid 0.1%…) "
SNIP
a comment
Antifaschistische NoDebt Jun 15, 2016 2:03 PM
playbook.
1. find a "buddy" who owns a 300k home.
2. agree to buy it for $400k. (May need to bribe the RE appraiser to allow a mortgage on a home at a price $100K over market.)
3. have "buddy" split the $100k profit with you by giving you 50k in cash after signing. (note: do not deposit the $50k in a bank)
4. make a few payments, and then give the keys back to the bank. (Dachsie might add, after making a few payments, go ahead and live in the house for a year of two without making payments and if they can never show you the deed or who owns the property currently, that is if they do a replay of a MERS-like debacle of 2008, maybe even work out a settlement in some (judicial) states to get back the payments you did make - an option to consider. Also buy as rural as possible on bigger piece of land - maybe even get an agriculture exemption from property tax on your property.)
5. buy 40 ounces of gold.
_____________________
a few more comments
rlouis's picture
rlouis Jun 15, 2016 1:42 PM
Section 8 housing vouchers can be used to purchase a home, but it requires completion of an approved consumer education course.
_____________
swmnguy's picture
swmnguy rejected Jun 15, 2016 3:57 PM
Where is an average new home $150,000?
The lack of people with even $400 at hand goes far to explain why bankers were interested in subprime lending in the first place; because they've already lent all the money qualified borrowers are willing to borrow. The only way the banks can generate any money velocity is by making more and more risky loans, but they can't price them correctly or the borrowers won't take them. Fortunately for them, they bought control of government policy, so they can make it so they can lend the imaginary money from the Fed, they can keep all the carrying charges, and the goverment will buy all the debt from them, so the banks have no skin in the game whatsoever.
_____
As in 2008, the people losing their jobs and being sent in to poverty are tellers and low-level staff, not the fat cat investment bankers with their huge bonuses and crooked Wall Street wheeling and dealing.
As for predatory lending and all that jazz, fraudulent and irresponsible behavior is REWARDED, so is repeated.
____________
https://www.youtube.com/watch?v=gpGrMP9vwRk
REALIST NEWS - Bank Of America Firing Thousands & Subprime Mortgages Are Back
jsnip4
Published on Jun 17, 2016
_______
http://www.zerohedge.com/news/2016-06-15/bank-america-set-fire-8000-banker-layoffs-accelerate
Bank Of America Set To Fire 8,000 As Banker Layoffs Accelerate
by Tyler Durden
Jun 15, 2016 1:45 PM
A few months ago we pointed out that mass layoffs were coming for bankers due to declining revenues and more difficult market conditions, and now we're seeing the first major wave of that come to fruition.
Bank of America has announced that it will fire as many as 8,000 employees within its consumer division the FT reports.The core reason given for the headcount reduction in this instance is that digital banking is picking up the pace, and has reduced the need for "back office staff" and bank tellers.
This is a trend that BofA highlighted in its In its Q1 earnings press release, as the bank showed that mobile banking users had shot up 15% y/y.
The bank has already slashed headcount by more than 10,000 in 2015, and has cut almost 40,000 from its consumer division alone since 2009 (bringing the total at the end of Q1 to 68,400). The layoffs are in line with what has been happening to its retail branch count, which has fallen by about 1,400 over the past seven years. Thong Nguyen, president of retail banking told a conference in New York this week that the numbers would "probably go down to the low 60s", implying as many as 8,000 layoffs are on the horizon..."
SNIP
________________
http://www.zerohedge.com/news/2016-06-15/subprime-mortgage-back-its-2008-all-over-again
The Subprime Mortgage Is Back: It's 2008 All Over Again!
by Tyler Durden
Jun 15, 2016 1:25 PM
Submitted by Simon Black via SovereignMan.com,
Apparently the biggest banks in the US didn’t learn their lesson the first time around...
Because a few days ago, Wells Fargo, Bank of America, and many of the usual suspects made a stunning announcement that they would start making crappy subprime loans once again!
I’m sure you remember how this all blew up back in 2008.
Banks spent years making the most insane loans imaginable, giving no-money-down mortgages to people with bad credit, and intentionally doing almost zero due diligence on their borrowers.
With the infamous “stated income” loans, a borrower could qualify for a loan by simply writing down his/her income on the loan application, without having to show any proof whatsoever.
Fraud was rampant. If you wanted to qualify for a $500,000 mortgage, all you had to do was tell your banker that you made $1 million per year. Simple. They didn’t ask, and you didn’t have to prove it.
Fast forward eight years and the banks are dusting off the old playbook once again.
Here’s the skinny: through these special new loan programs, borrowers are able to obtain a mortgage with just 3% down.
Now, 3% isn’t as magical as 0% down, but just wait ‘til you hear the rest.
At Wells Fargo, borrowers who have almost no savings for a down payment can actually qualify for a LOWER interest rate as long as you go to some silly government-sponsored personal finance class.
I looked at the interest rates: today, Wells Fargo is offering the exact same interest rate of 3.75% on a 30-year fixed rate, whether you have bad credit and put down 3%, or have great credit and put down 30%.
But if you put down 3% and take the government’s personal finance class, they’ll shave an eighth of a percent off the interest rate.
In other words, if you are a creditworthy borrower with ample savings and a hefty down payment, you will actually end up getting penalized with a HIGHER interest rate.
The banks have also drastically lowered their credit guidelines as well… so if you have bad credit, or difficulty demonstrating any credit at all, they’re now willing to accept documentation from “nontraditional sources”.
In its heroic effort to lead this gaggle of madness, Bank of America’s subprime loan program actually requires you to prove that your income is below-average in order to qualify.
Think about that again: this bank is making home loans with just 3% down (because, of course, housing prices always go up) to borrowers with bad credit who MUST PROVE that their income is below average.
[As an aside, it’s amazing to see banks actively competing for consumers with bad credit and minimal savings… apparently this market of subprime borrowers is extremely large, another depressing sign of how rapidly the American Middle Class is vanishing.]
Now, here’s the craziest part: the US government is in on the scam.
The federal housing agencies, specifically Fannie Mae, are all set up to buy these subprime loans from the banks.
Wells Fargo even puts this on its website: “Wells Fargo will service the loans, but Fannie Mae will buy them.” Hilarious.
They might as well say, “Wells Fargo will make the profit, but the taxpayer will assume the risk.”
Because that’s precisely what happens.
The banks rake in fees when they close the loan, then book another small profit when they flip the loan to the government.
This essentially takes the risk off the shoulders of the banks and puts it right onto the shoulders of where it always ends up: you. The consumer. The depositor. The TAXPAYER.
You would be forgiven for mistaking these loan programs as a sign of dementia… because ALL the parties involved are wading right back into the same gigantic, shark-infested ocean of risk that nearly brought down the financial system in 2008.
Except last time around the US government ‘only’ had a debt level of $9 trillion. Today it’s more than double that amount at $19.2 trillion, well over 100% of GDP.
In 2008 the Federal Reserve actually had the capacity to rapidly expand its balance sheet and slash interest rates.
Today interest rates are barely above zero, and the Fed is technically insolvent.
Back in 2008 they were at least able to -just barely- prevent an all-out collapse.
This time around the government, central bank, and FDIC are all out of ammunition to fight another crisis. The math is pretty simple.
Look, this isn’t any cause for alarm or panic. No one makes good decisions when they’re emotional.
But it is important to look at objective data and recognize that the colossal stupidity in the banking system never ends.
So ask yourself, rationally, is it worth tying up 100% of your savings in a banking system that routinely gambles away your deposits with such wanton irresponsibility…
… especially when they’re only paying you 0.1% interest anyhow. What’s the point?
There are so many other options available to store your wealth. Physical cash. Precious metals. Conservative foreign banks located in solvent jurisdictions with minimal debt.
You can generate safe returns through peer-to-peer arrangements, earning up as much as 12% on secured loans.
(In comparison, your savings account is nothing more than an unsecured loan you make to your banker, for which you are paid 0.1%…) "
SNIP
a comment
Antifaschistische NoDebt Jun 15, 2016 2:03 PM
playbook.
1. find a "buddy" who owns a 300k home.
2. agree to buy it for $400k. (May need to bribe the RE appraiser to allow a mortgage on a home at a price $100K over market.)
3. have "buddy" split the $100k profit with you by giving you 50k in cash after signing. (note: do not deposit the $50k in a bank)
4. make a few payments, and then give the keys back to the bank. (Dachsie might add, after making a few payments, go ahead and live in the house for a year of two without making payments and if they can never show you the deed or who owns the property currently, that is if they do a replay of a MERS-like debacle of 2008, maybe even work out a settlement in some (judicial) states to get back the payments you did make - an option to consider. Also buy as rural as possible on bigger piece of land - maybe even get an agriculture exemption from property tax on your property.)
5. buy 40 ounces of gold.
_____________________
a few more comments
rlouis's picture
rlouis Jun 15, 2016 1:42 PM
Section 8 housing vouchers can be used to purchase a home, but it requires completion of an approved consumer education course.
_____________
swmnguy's picture
swmnguy rejected Jun 15, 2016 3:57 PM
Where is an average new home $150,000?
The lack of people with even $400 at hand goes far to explain why bankers were interested in subprime lending in the first place; because they've already lent all the money qualified borrowers are willing to borrow. The only way the banks can generate any money velocity is by making more and more risky loans, but they can't price them correctly or the borrowers won't take them. Fortunately for them, they bought control of government policy, so they can make it so they can lend the imaginary money from the Fed, they can keep all the carrying charges, and the goverment will buy all the debt from them, so the banks have no skin in the game whatsoever.
_____