"Ok, this buyer can't qualify for a 6% loan. Too big a risk in that we don't believe they'll pay that back. But if we charge 12% on the loans, then we like our chances of making money on them. "
I don't know that I believe that logic is correct. That just seems to go completely against the rules of fairness. How can you count payments against my DTI that I'm not actually having to pay?
And to back that statement up, all I need to do is point to the fact that these geniuses were the ones that thought subprime loans and liar loans were a Mens Nike Air Max Tavas Print
Whats next? If I have very good credit and have the ability to get another 50k in loans over the next few months, then they can add those "potential" payments in my dti calculation too? Or what if my house has even more equity in it and I have the ability to increase my LOC another 50k. Should they be able to calculate the payments based on increasing the LOC just because I have the potential to pull that out?
There's my take on just two of the crazy loans these guys have. And now I see something this scenario above and all you can do is shake your head and wonder how these banks ever make money.
"Ok. We think its a waste of time to have people show us their w 2. Lets just have them agree to pay a higher interest rate and TELL US how much they're making. Thats not really much of a risk is it? Who would like about their income? "
less reserves are required generally speaking reserve requirements go form 6 months to 2 months with a DTI of 45% or less. I'm not saying you guys are wrong. But I am saying Air Max Tavas White Black that it seems completely illogical for a lender to count a payment for a LOC against you as if you had maxed Nike Air Max 2015 Prices
I see what you mean but the reason why lender and banks use this rule is because with the new laws lenders on the hook making sure the borrower has the ability to repay. Thats like me telling them that I'll be paying off my car in 6 months so I'd like my car payment removed from the calculation since it will be gone soon.
out the LOC.
Its absolute nonsense and shouldn't be legal quite honestly. The DTI calculation should only be using the payments you have at the present time, PERIOD. Not how much your payments "might be" were you to pull all your money out of a given instrument.
Thats like saying that they should count your credit cards based on what the payments would be if you maxed those out as well.
Keep in mind DTI isn't like FICO where a scale like good, better and best. DTI is yes or no. Before the QM rules kick in a conventional loans accept borrowers with a 50 DTI or less HOWEVER if a borrower is 45 or less Nike Air Max Thea Flyknit
Its inconsistent and quite literally inaccurate to calculate someone's DTI based on payments that the person isn't even responsible for.
Here was the subprime conversation at the banks:
There is absolutely no common sense with the banking industry.
Here was the liar loan conversation at the banks:
Although a zero balance they will use worse case senario and calculate the MAX equity line amount payment. So if you have a zero balance on a 150k equity line they will use the 150k payment amount counting against your DTI.
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