Once again, the blame is put on the wrong entity. With all of the fed and State requirements, borrowers receive numerous disclosures. Don't buyers have any culpability? Many self employed or borrowers go stated cause they do not show all to the IRS, or a coborrower with bad credit has income and will also contribute. 6% of loans are in foreclosure, over 94% are performing. It is the Capital markets fear that created the problem, not the non-performance.

Having survived as a mtg professional for over forty years .I felt the crash would have occured sooner .The industry players who devised programs withlittle or no underwring sense created a frenzey of mortgage profiteers ,who were poorly trained ,loosley regulated and modivated to make the deal .Lenders who without any due dillegence signed up brokers to perform the basic and most important part of the mortgage tranaction are the biggest culprits for the quality of the loans the approved and sold to wall street .In defence of the mortgage sales originator ,they sold a product that the client wanted and was aware of its pitfalls and traps .Greed and profit were on all sides of the transaction .I hope we will return back to BASICS of underwriting a loan application on the merits of the true facts .No income documentation or lite docs do have a place in obtaing a mortgage ,as well as adjustable rates with yearly caps and life caps .People with impaired credit with proven explanations and the ability to repay ,should not be excluded from obtaing a mortgage .I hope the major players are quick to make changes or the entire realestae indusrty is going to suffer .

Mr. Cohan sounds fair, but has no idea how these loans operate.

1. First, You cannot disclose what reset rates will be, because you cannot predict what interest rates will be years from the date of the loan closing.

2. No only deadbeats take out "no doc" loans--many people who are self employed or who have other liabilities or less than perfect properties cannot borrow from conventional lenders. I am self-employed and I have never defaulted on my six mortgages--most of which were adjustable, no income verification loans. Are you telling me I should not be able to buy my Brooklyn fixer-upper?

3. You are throwing the baby out with the bathwater--just because some subprime borrowers default (at most 10-15%) is no reason to punish all the rest of us who pay our mortgages month after month, year after year.
Why should 80% of borrowers be deprived of the opportunity to own a home because of the 20% who cannot pay?

4. The overall percentage of defaulting loans is so small, compared with the hardworking people who own homes in this country and pay their loans every month, that I think this panic is irrational and overblown. Bankers should come out from under their desks and start lending again.

SO TELL ME WHAT THEY DID WITH MY W2 FORMS AND MY TAX RECORDS AND MY CHECKING ACCOUNT INFORMATION IF WE BORROWERS LIED.YOU NEED TO BE FIRED BECAUSE YOU DONT HAVE A CLUE

WHOS THE LIER.NOT THE BORROWER.WHAT DID THEY DO WITH MY W2 AND MY TAX INFORMATION.LETS FORGET THAT THERE WAS AND IS PREDATORY LENDERS OUT THERE.WHY THEY BLAMING SUBPRIME LOANS WHEN COUNTRYWIDE SAID MOST OF THEIR DEFAULTED LOANS WERE FROM PRIME LENDERS WHO LOST THEIR JOB OR ILLNESS.IT SEEMS TO ME THEY NEED TO BE HELPING THE BORROWER WITH MORTGAGE INSURANCE.FACT NOBODY STAYS HEALTHY FOREVER.FACT YOU DONT KEEP YOUR JOB REAL LONG THESE DAYS EITHER

The number of loans that will actually go into foreclosure are relatively small as compared to the total number of home loans out there. All the bad press is obviously not good for home builders, home seller, subprime mortgage lenders and these investment bankers. It is very natural that there has to be a correction after the euphoria, but I think we are going to survive it very well. Many savvy home buyers are now picking up homes at great discounts. Investors are going to make a lot of money, once this bad press starts going away, as savvy real estate investors are now picking up foreclosure home bargains like some of those at http://www.atlantaforeclosuredeals.com

This sheds light on the problem of illegal aliens buying homes. It shows that multiple owners put their name on the deed to the house to buy it because most of them cannot prove any income thus paying no taxes and receiving social benefits and free healthcare. My entire street is Hispanic and all of them have at least four owners on each house and four of them have foreclosed already. Another three are for sale and have not sold in over a year.

I agree with the fact that mortgages are going to be cut in half--not that they should be. I'm sure that you would not want to be in the "half" that got cut. Would you? Mortgages will be cut in half because the market demands it. In the last few years alone millions of people have lost their homes due to foreclosure. In the coming years many, many more will. You don't need to drive far in my area to see that the foreclosure problem exists along the full spectrum of incomes. Unfortunately nearly everyone is ignoring the real cause of all of the so-called sub prime meltdown. The downsizing of the American worker. Living wage jobs in this country have been vanishing for over ten years. Easy credit just prolonged this agony. Now that the credit is vanishing along with the jobs the party is about to begin. Hold on to your hat this is going to be a good one!

excellent explanation what's going on in subprime. Being a mortgage broker during the boom, anyone with a bird brain could realize the fallout on the horizon seeing the types of loans that were being made by these lenders who weren't holding their own paper. Now stockholders are getting burned.

I am perfectly willing to acknowledge that not all mortgage brokers are the scum of the earth. I know they are not.

But what I have seen cross my desk from borrowers who are now in danger of losing their homes were originated by people who should be strung up. When borrowers bring their loan package to me and it includes their "application", I routinely ask them if the income shown is what their income and/or assets really was at the time. Nine out of ten times, their eyes get wide and they say something along the lines of, "I've never made/had that much money in my life!" These slimeball brokers were doing stated income/asset loans for people who, in all reality, should not have been put in to a house at all OR, could have qualified nicely for an FHA or special program loan with downpayment assistance from an approved agency. But, because Mr. Originator made more money doing a stated loan with a prepayment penalty, interest-only, ARM, Option ARM, or a combination of the above, the borrowers are in deep, and are facing foreclosure and/or BK. How these so-called mortgage "professionals" could sleep at night is beyond my comprehension.

Granted, these borrowers should have read what they were signing. I am not absolving the borrowers of all responsibility. However, the vast majority of these borrowers were clueless about mortgage terms, rates, and what to expect from a loan officer. They put their trust in him/her because they didn't know better.

One good thing to come out of this mess is this - maybe now borrowers will know what to look for when they talk to a loan officer or mortgage consultant. And - and this is a very good thing - all the unethical brokers will leave the industry, leaving only the honest ones to try and help the victims pick up the pieces.

I have been in the mortgage business for 15 years. I am getting a little tired of all of the blame for the current REAL ESTATE meltdown being placed on the mortgage industry. When investors and regulators changed the rules to allow builders to be realtors, mortgage companies and appraisers (all with proper disclosure), a critical set of safeguards were removed. There was no independent individual interested in the ACTUAL VALUE of the securitizing asset. Add to that set of problems the industry encouraging "flipping" of houses at ridiculous markups. 5 years ago you could not get a mortgage on a home for more than 10% of the previous sale if the sale was less than 12 months ago. When we let a new paint job and granite countertops inflate value by 30%, we invited this disaster. Govt regulators, investment banks and realtors (all of whom make far more on a sale of a home than the mortgage originator), and the IDIOTS buying grossly inflated homes, deserve far more culpability in this mess.

Everyone will experience the current situation from their own perspective. Dito to all of the comments posted. Most brokers and realtors have taken advantange of consumers during the past 5 years.
What happenened to buyer beware, I have dealt with so many stupid people that my biggest competitors were the thieves and the liars.
How do you compete with human nature, people just did not want to hear the truth that nothing lasts forever.
As the great prophet "Madonna ", said we live in a material world.
People are so overwhelmed with life that they refuse to acknowledge reality.
Since we cannot regulate ethics then it is for people to choose whom they trust and want to do business with.

Thanks,

Orlando Vera