all should sell option arms long live the ysp!!!!!!!!!!!!!!!!!!!

atruecloser · #1 (**permalink**) 07-22-2007, 09:05 PM

why should we all be selling the option arm???
simple we need to feed our families and stay afloat in this mess of an industry!!!!
3ysp in the back?????

who wouldnt rates arent too great right now why not sell world savings at 7.875% fully amoritized and call it a day wow!!!!!!!!!!1 what a great time to sell the option arm.

can you say money maker $$$$$$$$$$$$

member101 · #2 (**permalink**) 07-23-2007, 04:08 AM

Theresa,

Probably the wrong place for your post... We want to know who you are!

As for the option arm, its a GREAT program. It is definetly a good time to sell the option arm. Just make sure people don't make that minimum payment too often.

The option arm in the right hands is an amazing program, problem is that some people are just stupid - plain and simple.

HOWEVER none the less --- OPTION ARM = GREAT MONEY MAKER FOR BROKERS.

Also, if you can bank the deal and hide the ysp even better. $$$$

Erik · #3 (**permalink**) 07-23-2007, 07:59 AM

I'm moving this to the marketing category - seems like it will fit best there.

anthonyt2325 · #4 (**permalink**) 07-23-2007, 10:41 AM

Why 7.875% on a POA? You can get a much better rate on a 10/20 or 15/15 I/O. YSP shouldn't be the determing factor when deciding to place a client into a particular loan program.

member101 · #5 (**permalink**) 07-23-2007, 06:03 PM

I don't think it was Theresa's intention to imply that the determining factor when chosing a program is YSP.

I think she just meant that right now with how hard the market is, targeting possible Option Arm deals would be a great way to make money because of the YSP.

Correct me if I'm wrong Theresa.

florida man · #6 (**permalink**) 07-24-2007, 03:54 PM

I have never sold an option arm nor will I ever. Its a ripoff for the homeowner.

If they cant even handle an interest only payment on a 10/20 , then they shouldnt borrower the money.

Erik · #7 (**permalink**) 07-24-2007, 04:21 PM

How can you be ripped off if you understand what you're getting/agreeing to? Just stirring the pot.

florida man · #8 (**permalink**) 07-24-2007, 05:28 PM

Neg am loans = LOW PAYMENT. Thats all the homeowner sees. Then their mortgage goes up every month, and a year later they consistently call me shouting about it.

Neg am loans should be ILLEGAL . Period.

Lets face it. a 50% ltv neg am loan is now a 70% ltv loan due to prices falling. The mortgage is going up every month, and within a year it will be an 80% ltv loan.

The 'index' is so ubsurd , that the REAL payment is quite often well over 8% , so if they are that DESPERATE to make an artificially low payment, then they shouldnt get the loan in the first place.

How about instead we stop masturbating to the easy 3% yield on a 3 year HARD PREPAY, and actually care about the potential disasterous risks to the borrower.

Its much better to get a 10yr interest only fixed rate on a 10/20 with no prepay.

Prepayment penalites beyond a year should be illegal to boot too.

Erik · #9 (**permalink**) 07-25-2007, 10:46 AM

Why not make it illegal to miss a payment, spend more than you earn, get foreclosed on, go bankrupt, etc? My point is that the consumer must have some level of responsibility for their own welfare. I'm not a fan of the option arm either (never done one for anyone in fact - but then again I don't originate actively anymore) but at what point does it become the LO's responsibility to make a general decision for a borrower's welfare instead of allowing the borrower to make the decision themselves?

florida man · #10 (**permalink**) 07-25-2007, 06:02 PM

erik

we just use our common sense as professionals. Dont put a granny on a fixed income in a neg am.

Dont stick a guy with past history problems in a neg am. Dont stick a guy who has 20% ltv left in a neg am.

Dont stick a guy in a neg am with a 3 year hard pre payment penalty. In any scenerio.

Some guy living in a 500k house, and gets a 15% ltv loan neg am with a 750 fico score is fine.

If i ever came across a guy with 30% or less LTV with a proven 700 fico who wanted a neg am so that he could fiddle around with his income, but could honesty AFFORD to pay the full payment, year after year as that fully am payment WENT US as his mortgage balance went up, fine.

However, I would probably suggest him UNLOADING the house and downsizing to NO mortgage, which is the best mortgage someone can have regardless.