> Jordan Hayes wrote:
>> Ask Joanna: she says banks don't have skin in the game :-)
>
> To shag: There wouldn't be.
heh. I didn't realize J was being a smartass
> To Jordan: With the seller's loss of downpayment equity and possible
> continuing obligations after a short sale, the banks wouldn't have 20K
> of
> "skin in the game". And what skin in the game they do have doesn't
> mean they
> won't enjoy a little overassessment con played on a potential buyer.
>
how does a bank pay an overassessment con on a potential buyer? at least here in this state, the assessment doesn't happen until after i've made my intentions clear: i'm a buyer.
is it different in other states?
as to Jordan's issue with mortgage brokers. boy, I'll say. and more. first, they're sales people. it's all about making a sale. second, it's an entire juggernaut of vertical and horizontal channels that mediates between buyer and bank with the loan $. I know y'all are arguing technical details, but i'm talking sociology of a real estate transaction here, specifically the process of buying a home - where home is used instead of house for a reason.
Was initially going to use a credit union but they were kinda weird, encouraging me to get a less of a loan than i was qualified for so as not to let the real estate agent think i had more money to play with.
Uh... OK. So, I could have gotten a 340k loan but have me go with a 265k loan because somehow that's going to mean the real estate agent will show me 340k houses so i can bid 265k on them? I honestly don't understand that one...? Anyone have clue?
anyway, I made an appt to see a houses i was interested in and, seeing as how one looked like I could snag it for a deal, I decided I had nothing to lose if I just low-balled the offer. But to do that, I still need a bit more money than the credit union pre-approved. Meanwhile, my RE agents is explaining that I am eligible for a VA loan which means I don't need to drop 60k in my savings on the place. Plus, she explains that I have no mortgage insurance,meaning - huh - i can get plenty of house/condo for less than rent. awesome!
next thing I know,my RE agent has me on the phone with a rep from a local bank. It's 11 a.m. Sunday, I'm grocery shopping, and I'm getting pre-approved quick and dirty while the mortgage broker sits in the bleachers at her kid's little league game, working the loan app process. 30 minutes later: You're Approved Missy!
At some point in there, I'm reluctant to go with the local bank, wanting to stick with credit union. The local bank mortgage broker says, "well, not a worry. we are local, and that's a good thing. it means people are in our offices rigth here in town. I'm not about putting pressure. You need to do what works for you. We just give you our terms and let you decide."
She tries to play on the small town thing, even though the fact is they are just reps for some bigger bank who is really carrying the loan. I thought was pretty funny. I mean, what she means is, if i have issue with Big @$$ Bank later, I talk to her, and not someone jockeying a desk for Wells Fargo in Kansas City, MO or something. meh. (She was a slick sales rep, lemme tell you)
meanwhile, the fact is, i just got a way better rate and terms with the local bank than with the credit union. And there's an interesting reason for that I speculate on below.
somehow, I had it in my head that the banks want to put brakes on risk a lot more than it feels like they do. and maybe they do, but the people all around you -- mediating between Big A$$ Bank and you as buyer -- theese folks, from your real estate agent, to your mortgage broker, to the appraiser, to the law firm, to the inspector, to the termite control people, to whomever..., these folks are all in it together. they wheel and deal, one big writhing, tangled mass of humanity all of whom have livelihoods that rest on you becoming a "buyer". It's like this big incestuous party going on behind the scenes: I wash your back with this buyer and you wash mine with another. I send you this business and down the road, you'll do me a favor in return.
Frankly, it was really quite fascinating to watch.... It's like this massive juggernaut with all these people completely invested in making this transaction happen one way or another. At this point, there's something going on here that vastly complicates analysis of simple cost-benefit motivations.
shag