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Schizlor
@
2011 Jun 16, 3:21am
Think about all the people who flunked out of HAMP!
This is a majority percentage I think.
70% DTI is absurd — that could be more around 100% of net in many cases!
The funny thing was the approval was granted by Fannie Mae's DU (desktop underwriter) system. Sometimes our proprietary underwriting engine would not render a decision (approve, decline, or "manual underwrite required") but default to running the loan through the DU system instead. You could request DU process it manually, but sometimes our system would just default to that. You should have seen the look on the manager's face when the loan came back, "DU: Approve". She took it to the UW, who refused to sign off on it. I believe the DTI was 72%. The UW took it to the branch manager for approval. Her decision was, "Well....if DU approved it..." and they closed the loan.
I'l love to know how that one worked out for the borrower. I'm guessing you're correct in that they were probably pushing 100% DTI on net income.
This was the trend during the bubble. If someone wasn't comfortable signing off on something, they'd pass it up the chain until someone was willing to "back" the decision to approve it. It was a lot like the nazi trials, where anyone asking for an explanation got the, "I don't know, I was just doing what they told me to." Branch managers pushed for numbers (approvals) from underwriters, and they were encouraged to take loans (physical files) home with them (illegal in many instances) and to decision them off the clock (under veiled threat of being laid off for non-performance). It really was just an assembly line. If they could find any tiny shred of justificaiton for approving a loan, they would do it. ("Well, I have a DU approval, so who am I to decline this?")
It was all about, "Do I have a defensible reason for approving this loan if someone comes asking about it later?" not, "Do I have a justifable reason for approving this loan?"
People bragging while anonymous… beats me.
What's worse, bragging anonymously on line or actually bragging to people you know?
Katy Perry
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2011 Jun 16, 5:59am
I pay 8 percent of income to rent and over 40% a month to pay down a 15k credit card bill. I'm wacking it down by $1500-$2000 a month. I'm happy that it came together. I had some business start up cost for equipment and insurances( what a scam) and to tide me over before the checks started rolling in. I feel fortunate to have been abile to pull it together. I was Zero debt just three years ago. I'd like to never use that thing again. great thread BTW
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I've read different numbers on the internet, ranging from 25-40% of net income or gross income (big difference) should go to rent. I am thinking I need to bump up my budget for rental expense than what I have been thinking.
Thoughts?