Amendment – to Non-Traditional or Non-Agency?
| I added 3 new paragraphs at the end | |
|
Even though historically it’s been called ‘non-conforming’ – during the past decade or so it picked up the classification of ’subprime’ – which these days gets a knee-jerk negative reaction from most people. It’s my feeling this next-generation of lenders may utilize a different title, my guess is it could be Non-Agency or Non-Traditional. Although throughout my long career, I know it to be Common Sense Lending; considerably different from the foolish and reckless standards utilized by the amateurs who ran the industry sector this past decade! I can’t wait until our future parent company, has it’s new wholesale lending operation in full swing, as today the public only can get help if they are on the extremes of the spectrum Fannie/Freddie at one end and FHA at the other. As I see it, the coming big issue is the huge potential losses at FHA, which I and some others have long predicted . Their default rate is currently 7% and their reserve fund has fallen to 3%. With a Government bail-out of FHA becoming more likely each month, it would be tragic for there to only be Fannie and Freddie available to Americans who need home loans, since their loan standards do not address most middle american family. My preference is ‘Portfolio Quality’™ as the new term for the type of Common Sense Lending which helps those borrowers in between the two Government programs Fannie/Freddie and FHA. But first, what is Common Sense Lending? I bet you know industry people who are mostly clueless about what makes up a qualifiable borrower, in fact since genuine underwriting isn’t taught to most new people in the industry vs. the old days when everybody started with that training – it’s a real challenge today to get the other guy to actually know what Common Sense Lending actually is (without intense training & education). I’ve written quite a bit about the 3 C’s of Credit that’s the foundation of it (both here in this forum and others – you can Google me for others) … you get the feel of it by doing. In my own case, when I was a snot-nosed twenty-something beginner in the lending industry, I made (supervised) credit decisions (either approved or rejected or counter-offers) to probably a couple of thousand borrowers before my first employer trusted me to do it on my own. In conclusion, all I can say is if you’re gonna work in MY industry, Learn It !!
|
|
