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    Home Unlabelled Independent mortgage companies get home loans for borrowers with weak credit or low incomes—and taxpayers back them Investing

    Independent mortgage companies get home loans for borrowers with weak credit or low incomes—and taxpayers back them Investing

    June 03, 2018

    Independent mortgage companies get home loans for borrowers with weak credit or low incomes—and taxpayers back them Investing

    Independent mortgage companies get home loans for borrowers with weak credit or low incomes—and taxpayers back them

    Posted: 02 Jun 2018 04:21 PM PDT

    https://www.bloomberg.com/news/features/2018-05-24/small-time-bankers-make-millions-peddling-mortgages-to-the-poor

    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.

    No one is saying the system is close to another collapse. Yet nonbanks, more loosely regulated than the JPMorgan Chases of the world, are bigger players today than during the last mortgage bubble, according to a Brookings Institution report. They're making almost half of new loans, compared with 19 percent in 2007. As before, many are companies you've never heard of, like American Financial Network, a closely held firm based in Brea, Calif. A few are better-known, such as LoanDepot, Freedom Mortgage, and the industry leader, Quicken Loans, with its ubiquitous Rocket Mortgage television commercials.

    Nonbank mortgages make up about 80 percent of the loans for borrowers insured by the U.S. government.

    To protect taxpayers, FHA borrowers are supposed to make small down payments, equal to 3.5 percent of the home's purchase price. But many FHA borrowers put nothing down at all.

    In civil fraud complaints, the Department of Justice has accused many companies, including Quicken and Freedom Mortgage, of improperly underwriting FHA loans and then filing claims for government insurance after borrowers defaulted.

    There are other worrisome signs. Even in a strong economy, recent FHA loans are souring faster than those made years ago when the industry had stricter credit standards, the Mortgage Bankers Association says. About 9 percent are 30 days or more past due, manageable by historical standards and well below the high of 14 percent in 2009. But the FHA itself is concerned that, on average, borrowers are spending 43 percent of their income on debt payments, the highest level in at least two decades.

    Last year the FHA's capital reserves barely met the legal minimum the government must set aside for bad loans.

    If too many loans sour, she says, the FHA could end up financially weakened and unable to extend help during the next downturn. "Borrowers are stretching more," she says. "We're concerned about it from a borrower perspective and a taxpayer perspective."

    One reason more borrowers may be stretching: Real estate prices are soaring again. Bidding wars are back in many cities. That's only making it harder for first-time and lower-income borrowers... Homeownership has fallen from its 2004 peak of 69.2 percent to 64.2 percent in the first quarter. Rents are skyrocketing, too, pricing some families out of any shelter at all.

    submitted by /u/COMPUTER1313
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    Trump's jobs-report tweet broke a protocol designed to prevent giving early hints to investors

    Posted: 02 Jun 2018 12:05 PM PDT

    http://www.chicagotribune.com/business/ct-biz-trump-jobs-report-tweet-20180601-story.html#nt=oft13a-5gp1

    Kind of interesting. He said "looking forward to seeing the employment numbers" shortly before they were released. While he didn't share the info or say what they were, it manipulated the market because it implied that they were good.

    submitted by /u/skilliard7
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    Looking for an article about S&P growth between trading days vs. during trading days

    Posted: 02 Jun 2018 05:10 PM PDT

    A few weeks ago I read an article (post?) that looked at when the S&P500 grew, day-to-day. If I recall correctly almost all the growth was made inbetween closing and opening the next day.

    It compared buying right before closing and selling right when it opened vs. buying once markets open and selling right before closing. Option one had a lot of profit, option two had none or even made a slight loss.

    I can't, for the life of me, find it again.

    Thanks in advance.

    submitted by /u/BC1721
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    I give you $1 million USD and 1 year to make as much money as possible, what do you do? Assume I get the initial $1 million back.

    Posted: 03 Jun 2018 02:47 AM PDT

    18yo, tell me about IRAs

    Posted: 02 Jun 2018 04:01 PM PDT

    Hey everyone, first post here.

    I'm 18, just graduated high school, and hold a full time job for the summer (will drop to part time when I start college, which is paid for by scholarships, and I'll be living at home) making around $1400.00/month after taxes. I'm interested in opening an IRA, as I'm still pretty young and the long-haul seems a lot shorter when you start early (or so I've heard.)

    What are some important things to know about IRAs? What would be the best IRA for a person my age, with my income, in my situation? How much should I invest? Please feel free to add any other info that you or someone else has found useful.

    Thanks!

    submitted by /u/Jmmscout
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    401K Managed funds outperformed Index Funds - what to do next?

    Posted: 02 Jun 2018 10:22 PM PDT

    We just got an annual fee list for the funds in our 401k at work. I was about to "help" my co-workers realize the value in selecting the index funds due to the cheaper fee.

    As I looked closer, I realized that the actively managed growth funds did a lot better than the index funds (which is where I have my money.)

    Any thoughts on whether to go with conventional wisdom and stay in index funds? Or shift to the growth funds? Is there something I'm not understanding about "growth" funds in regards to expected performance?

    I'm feeling kind of stupid for having shifted all my money into the index funds.

    Large Cap
    Vanguard Inst Index I - 14% 1 YR / 13.3% 5 YR (fee .04%)

    T Rowe Price Instl Large Cap Core Gr - 31% 1 YR / 18.4% 5 YR (fee .57%)

    Mid Cap

    Vanguard Extended Market Index Instl 13% 1 YR / 11.9% 5 YR (fee .06%)

    T Rowe Price Mid Cap Growth 20% 1 YR / 15.3% 5 YR (fee .77%)

    International

    Vanguard Total Intl Stock Index 17% 1 YR / 6..4% 5 YR (fee .11%)

    American Funds Europacific Growth 21% 1 YR / 8.4% 5 YR (fee .85%)

    submitted by /u/Pleather_Boots
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    I'd like to invest in companies that do commercial spaceflight. What are some stocks to look at?

    Posted: 02 Jun 2018 12:25 PM PDT

    Acorns vs Betterment

    Posted: 02 Jun 2018 08:03 PM PDT

    Currently using Acorns, investing $10/day plus round ups in their aggressive strategy. Looking for opinions on the service Betterment (or other similar services). This isn't retirement money, just fun money that I'd prefer to not touch and grow into something significant. Thanks in advance!

    submitted by /u/Ludlow2587
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    Winning Bid to Have Lunch With Warren Buffett: $3.3 Million

    Posted: 03 Jun 2018 04:12 AM PDT

    Annual auction has raised more than $25 million for San Francisco charity Glide

    https://www.wsj.com/articles/winning-bid-to-have-lunch-with-warren-buffett-3-3-million-1527946585

    submitted by /u/mepcotterell
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    What are the indicators you seek that would warrant investment in Virtual Reality?

    Posted: 02 Jun 2018 11:21 PM PDT

    Looking to generate some discussion. The industry has some potential to expand, I think. With gaming concepts like Beat Saber and some tie-ins on the PS4, it'd be cool if there were arcades that catered to this technology.

    Where do you think VR will be in 5 years, or 10 years? What indicators would you look for to determine the right company to invest in?

    submitted by /u/Borne2Run
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    GE:yay or nay?

    Posted: 02 Jun 2018 11:02 PM PDT

    Bought it already but would like second opinions?

    submitted by /u/tresshonest
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    Swing trading using LEAPs?

    Posted: 02 Jun 2018 11:01 PM PDT

    How would a buy-the-dip strategy work using LEAPs?

    Ex: In Feb 2018 when SPY corrected significantly downward, would this be a good time to buy SPY LEAP options (as opposed to shares, assuming bullish on the ETF)?

    Or would the increased volatility make purchasing the options unfavorable?

    Also, do you all prefer ITM, ATM, or OTM with LEAPs? ... OTM is effectively higher leverage, right?

    submitted by /u/MindFuktd
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    Companies worth investing in in 2018 with small capital?

    Posted: 03 Jun 2018 02:16 AM PDT

    I'm sure there must be a post on this already - but is there an industry or companies which will almost certainly guarantee a large ROI if I invest now.. Renewable energy companies? Vegan companies?

    submitted by /u/standingonbenches
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    Financial newspapers in Asia ?

    Posted: 03 Jun 2018 02:08 AM PDT

    In the US we mainly use WSJ as a reference. In the UK / Europe, the FT is the most popular. What about Asia ? I currently use the Asia online version of the WSJ complementing with FT articles, but I feel there must be a "reference" newspaper used by bankers or investors. Thanks !

    submitted by /u/EfteNews
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    Doing DD

    Posted: 02 Jun 2018 06:25 PM PDT

    Early 20s looking to get more involved in investing. Can anyone help/give advice on doing due diligence? What should I focus on when looking at companies?

    submitted by /u/jbone5989
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    What is the easiest way to invest in Gold without having to buy physical pieces?

    Posted: 02 Jun 2018 12:14 PM PDT

    I am pretty bullish on Gold given the recent dip in price. I want to get some quickly but would rather not go to a gold shop or pawn shop to buy it physically. Are there other ways to invest in gold long term like in the stock market or something?

    If physical gold is the way to go, do you have any recommendations on where to buy? Online retailers? How much over market value should I expect to pay? Basically, what would be a good price at this moment?

    Your input is greatly appreciated.

    submitted by /u/longhorn2118
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    Movement towards non-plastic straws

    Posted: 02 Jun 2018 07:08 AM PDT

    Has anyone looked into this? Paper manufacturers or entire ETFs? Can't seem to find a lot of info regarding who the big players are.

    submitted by /u/bryan2384
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    Structural risks in the Chinese economy

    Posted: 02 Jun 2018 09:52 AM PDT

    What are the risks of policies like the ones outlined in this article:

    WSJ: That Calm Chinese Stock Market? It's Engineered by the State

    This is more conspiracy than anything, but I have long maintained that the Chinese government let's companies cook their books.

    Another point, and this is based on evidence (I'll try to find the WSJ article), is that the government's close relationship with companies creates a "too big to fail" mindset and the government has provided direct cash infusions to keep some companies afloat. The article I am thinking of refers to a financial company that provided retail customers with very high yielding, guaranteed return products that were supposedly backed by investments, but were nothing more than a pyramid scheme. The general mindset of the customers and the company was that the government would step in to guarantee the investment should the company be unable to, and ultimately that's what ended up happening.

    It wouldn't surprise me at all if many Chinese companies are engaged in outright fraud and are taking undue risk with the expectation that the government will step in to maintain stability. How long can this last before we see some sort of crisis in the Chinese economy or am I entirely off base?

    submitted by /u/throwaway_947920047
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    ishares MSCI china or SPDR s & p china?

    Posted: 02 Jun 2018 08:58 AM PDT

    Which one would you choose to add a slice of china to your portfolio? I like that they both carry Tencent/Alibaba as major holdings.

    submitted by /u/Doctor_Dragonblood
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    Converting Canadian to buy American index fund

    Posted: 02 Jun 2018 01:12 PM PDT

    Is that a good idea

    submitted by /u/Awesomebsaucse
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    First week investing

    Posted: 02 Jun 2018 07:09 PM PDT

    started investing for the first week, ups and down, still have 1k buying power, what should I add or increase in my portfolio? thanks!

    Also when should I buy? wait for another dip or now?

    https://imgur.com/a/VrId7sI

    submitted by /u/toomuchtoxicity
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    What are the best all in one Credit Unions or Financial Institutions?

    Posted: 02 Jun 2018 05:13 PM PDT

    What I need:

    1. Free high interest Checking & Saving

    2. ATM Cash depo./Institution open 365 days

    3. Low regular APR Visa CC with few thousand limit (no Dis/Amex)

    4. Zelle (to receive money fast in emergency)

    5. Cheap car loan & insurance

    What's on my mind:

    • Alliant CU Checking 0.65 & Saving 1.60 [high interest]

    • Local CU Checking [Cash depo.]

    • USAA Checking, Visa CC (8.x) [low APR CC; Zelle]

    • Ally Checking & Saving [backup Checking acc./365 support incase other card fail; Zelle]

    • Discover CC [backup CC & high limit]

    I don't want to deal with 5 institutions/6 cards. Please suggest me where should i open accounts to get above features.

    submitted by /u/imenmyself1234
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