Getting Rich on Government-Backed Mortgages

[SuburbanFarmer]

Not really an economic problem, until they start bundling and leveraging on the mortgages.

Which they have, of course. This is why nothing was allowed to change after 2008.

[nmoore63]

Government backed mortgages... fucking morons...

[Ex-California]

Hi 2018! What's new under the sun?

Bloomberg:

Getting Rich on Government-Backed Mortgages
A branch manager gets home loans for borrowers with weak credit or low incomes—and taxpayers back him up.

Many of Christian’s customers have no savings, poor credit, or low income—sometimes all three. Some are like Joseph Taylor, a corrections officer who saw Christian’s roadside billboard touting zero-down mortgages. Taylor had recently filed for bankruptcy because of his $25,000 in credit card debt. But he just bought his first home for $120,000 with a zero-down loan from Christian’s company. Monthly debt payments now eat up half his take-home pay. “If he can help me, he can help anyone,” Taylor says. “My credit history was just horrible.”

Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program. It’s a sweet deal: He gets his nearly risk-free commission. Taylor puts no money down. If things go south, the government ultimately bears the risk.

This kind of lending echoes the subprime mortgage boom that preceded the credit crisis of 2008. Then, as now, independent mortgage companies, the so-called nonbanks, dominated the business of making loans to people with blemished credit and low incomes. In the pre-crash years, companies such as New Century Financial Corp. helped spur the crisis with their shoddy underwriting standards. Using a line of credit from a major bank, they would offer mortgages essentially to anyone with a pulse. They would then quickly resell them into a market that repackaged them into high-risk securities that were destined for failure, infecting the financial system and requiring a government rescue.

What the fuck is that creature?

And you can declare bankruptcy for only $25k of debt?

[SuburbanFarmer]

That pitiful beast is known as a “financial professional”. They pretty much control our planet.

[Haumana]

And you can declare bankruptcy for only $25k of debt?

No need. Just don't pay and don't answer their phone calls for a while and they discharge the debt. You will have to claim it as income at some point though.

[SuburbanFarmer]

And you can declare bankruptcy for only $25k of debt?

No need. Just don't pay and don't answer their phone calls for a while and they discharge the debt. You will have to claim it as income at some point though.

lolwut?

I did this with my first and only credit card. They tried calling me a few years ago, and I said several times that the debt was decades old.

"Are you disputing that this is yours?"
Nope.

"Well our records show it was just last year"
That's because your company just bought the debt from someone. It's from 1998.

"..... I'll check with my supervisor"
Never got called again.

[Haumana]

And you can declare bankruptcy for only $25k of debt?

No need. Just don't pay and don't answer their phone calls for a while and they discharge the debt. You will have to claim it as income at some point though.

lolwut?

I did this with my first and only credit card. They tried calling me a few years ago, and I said several times that the debt was decades old.

"Are you disputing that this is yours?"
Nope.

"Well our records show it was just last year"
That's because your company just bought the debt from someone. It's from 1998.

"..... I'll check with my supervisor"
Never got called again.

They sent me a 1099 something or other and the IRS said I had to claim it.

[SuburbanFarmer]

No need. Just don't pay and don't answer their phone calls for a while and they discharge the debt. You will have to claim it as income at some point though.

lolwut?

I did this with my first and only credit card. They tried calling me a few years ago, and I said several times that the debt was decades old.

"Are you disputing that this is yours?"
Nope.

"Well our records show it was just last year"
That's because your company just bought the debt from someone. It's from 1998.

"..... I'll check with my supervisor"
Never got called again.

They sent me a 1099 something or other and the IRS said I had to claim it.

Wow that is bizarre. Might be a new thing? This was around 5 years ago.

[clubgop]

lolwut?

I did this with my first and only credit card. They tried calling me a few years ago, and I said several times that the debt was decades old.

"Are you disputing that this is yours?"
Nope.

"Well our records show it was just last year"
That's because your company just bought the debt from someone. It's from 1998.

"..... I'll check with my supervisor"
Never got called again.

They sent me a 1099 something or other and the IRS said I had to claim it.

Wow that is bizarre. Might be a new thing? This was around 5 years ago.

I think it depends on the debt. Got student loan deferments as a soldier still had to claim them. Got some car debt discharged never a 1099 IIRC.

[Haumana]

It was a credit card. 1099-C was what I got for 32k. Fuck Mastercard, btw.