In Ohio 23 Dead People Received Mortgage Loans



One of the funniest things about this economic meltdown is that nobody
thinks it's funny. So, even if you don't think it's funny, you'll have
to at least grin at this. In Ohio, mortgage lenders, who were making
$75,000 - $100,000 a month, got so greedy they kept lowering the
standard for loans until eventually the standards got so low, they
were making loans to dead people:

". . . There are several other glaring mistakes that contributed to
this financial meltdown. First of all, the government kept the federal
funds rate far too low for far too long. In the early 2000?s, global
money managers moved their money away from the traditionally safe
haven of government treasuries because Alan Greenspan kept the rate at
1%. These money managers were searching for an investment that would
provide them considerable return with minimal risk. Wall Street
investors realized this huge demand for investment securities and so
they created the mortgage backed security by pooling thousands of
mortgages together, most of which paid anywhere from 5-9% in interest,
and securitizing them into bonds to be sold to these global money
managers. The global investors fell in love with the mortgage backed
securities and they could not get enough of them. Facing this huge
increase in demand, Wall Street investors began demanding more
mortgages than were currently available. SO mortgage lenders began
lending to subprime candidates who previously would not have qualified
for a loan. To see how ridiculous and quickly the policies for
mortgage lending evolved, it is essential to look at the requirements
for the loan itself.
1. In order to expand to a broader base, mortgage lenders first
created the stated income verified asset which stated that a candidate
for a loan just needed to state how much his income was and show that
he had money in his bank account. The previous requirement for
providing a W2 form or income verification form had now been
abandoned.
2. The policy then evolved into the stated income stated asset which
required a loan candidate to state what they made and how much was in
their bank account and then the mortgage lender would call their work
and verify that they worked there. Then an accountant, who was hired
by the mortgage lender, had to say that for their field it is possible
that they COULD make that much money?..not that they DID make that
much money??why did they not ask for the w2 form? Because they wanted
to create as many mortgages as possible.
3. The policy then evolved into the no income verified asset which
stated that a candidate for a mortgage need not state how much they
made for a living or where they worked??but all they had to do was
show that they had money in their bank account.
4. This policy lasted until the mortgage lenders came up with the NINA
or the no income no asset policy which stated that you don?t have to
do anything but have a credit score and a pulse to get a mortgage
loan. However, even a pulse was not required in Ohio where 23 dead
people received mortgages.

The point of this all is to show that these mortgage lenders made a
killing (as much as 75-100 thousand dollars a month) off of issuing as
many mortgages as possible and selling them off to Wall Street
investors who couldn?t get enough of them. These lenders issued
hundreds of thousands of dollars in mortgages to people who could
barely make their car payment. They did this by leveraging their
companies, some at a 20 to 1 level, and issuing more and more
mortgages. Everyone else was doing it and if these mortgage lenders
didn?t lower their standards and continue to feed the demand on Wall
Street, then their competitors would. Moreover, the government rating
agencies gave these highly risky assets a AAA rating equal to the
safety of a government treasury! The system was designed to fail and
was designed to fail badly. Pretty soon the housing prices in America
had escalated to a level 4 times as high as the average family income
and the biggest speculative bubble in American history popped. . . ."

http://www.gottamentor.com/ViewBlog.aspx?b=113
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