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Tuesday, December 25, 2007



As the raise in house pricing the lender will not expet the repayment, but he expects the refinance or the reset of the loan from the borrower.


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V. Marie Moore

I understand the financial institution's involvement in this sub-prime debacle, but when is anyone going to address the new-home builder's/seller's responsibility in WILDLY INFLATING HOUSE PRICES that would soar anywhere from 1% - 5% EVERY WEEK? These prices would be tempered by offering the "desperate buyer" a ridiculous scheme of one-stop "buy here/pay here" type proposals, where the builder would temporarily "don the hat" of becoming a FINANCIER to offer the buyer "builder financing" from a "dummy corporation" set up by the builders to "temporarily" finance the purchases of these homes. Often, this agreement was made while the desperate buyer would be under a great deal of duress and stress knowing this deal was simply not "comforatable or reasonable" for their particular financial situation.

The builders, themselves knew from the beginning that the buyer would never qualify for conventional lending from a direct reputable source, such as a bank. The caveat: The buyer was REQUIRED to sign a document acknowledging that they knew the builder/seller-financed mortgage would and could be sold at anytime; and it was sold as an "investment bundle" within 3 - 12 months after the closing to the 3rd party financier, who is NOW holding and shouldering ALL the blame or the mortgage debacle! Thus, removing the financial responsibility from the builder for initially orchestrating this deal... The builder has gotten their money and they are GONE!!! I witnessed this first hand and I realized that I nor my income could keep up with these rising prices enough to make a mortgage application through conventional lending methods. I vowed that I would only purchase a home that I could afford through conventional fixed-rate financing, without becoming involved in any third-party financing type schemes.

Further, I haven't read, seen nor heard one thing about the flagrant disparity that exists and (has been widening/growing) between the homes tax assessed value and the "phony baloney" appraiser's value that is falsely created in order to assure the house will be able to "get closed" by appraising at the builder's/seller's asking price vs. the city or county's proposed assessed value. This was kinds tricky, especially wen the builder was building in an area where there were older homes in the nearby neighborhoods. It woud be sold as a win-win to the older neighbrhood, since the older homes would "appreciate in value", while maintaining their existing tax assessed values, but would be able to be sold at a higher price as driven by the prices of the new homes. I have also witnessed how the seller would often slip into panic or worry mode as they knew this could be the very specific time where the deal could actually fall apart and collapse, and their buyer may not be able to complete their elaborate financing scheme.

I say take a look at the NEW HOME BUILDERS and the exhorbiant profits they made in this time period! Afterall, the buyers were looking to be financed at the BUILDER'S ASKING PRICE, not the CITY or COUNTY's ASSESSED value. Perhaps if they were looking to finance just the assessed value, there would be no mortgage crisis/debacle occurring today!

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