Joe Prevost at Pioneer Funding sends the following:The real estate value correction we are currently experiencing is not a surprise to me. Home values appreciated at levels that could not be sustained. Major mistakes were made in how Wall Street created mortgage backed securities and sold them on the open market. Disreputable mortgage bankers and lenders created and pushed high risk mortgage products to unsophisticated real estate investors.
New investors acting as speculators tried to cash in on the aggressive appreciation by taking out risky mortgage loans as a vehicle to purchase properties they could not afford. When the market adjusted and values decreased a bit the speculation ended.
Remember about 2 years ago there were about 15 different "flip this house" type television shows running? Countrywide and Washington Mutual were pushing Adjustable Rate and Negative Amortization loans with large undisclosed commissions to loan representatives who were trained to get the client to sign on the dotted line.
Paul, you remember I predicted the demise of these two specific companies a long time ago. They should be held accountable for their abuses.
100% financing and reduced documentation loans were created to boost home ownership. Unfortunately the mortgage lenders mentioned above and many others twisted, lobbied and bullied the system to its knees. Now they have their cash and are out of the business or have moved on to another bank,leaving the American taxpayer and homeowner to pay the bill.
A home is still the best investment and source of wealth creation for most people. I caution all homeowners to be careful where you apply and take mortgage advice from.
Joseph Prevost
Mortgage Broker
360-697-5444
www.Pioneer-Funding.com
WA State License 510-MB-28031
No comments:
Post a Comment