Banks calling good loans

[Earl Weiss]

He told me what the payment was and I asked him the length of the term. He did not even know how long the loan was for. I have a feeling that there are alot of people out there in the same boat on business loans that don't realize this until it is too late.

Therein lies a bigger problem with the current mindset of many. They never consider the total cost, only "What it costs me per month."

They don't realize this debt is the same as a dealer having a needle in their arm.

 

[2Biz]

It was very interesting the FNA's we did where the homeowner had a ballon and didn't even know it. It was also amazing how much denial they were in once it was pointed out to them. "Can't be! You don't know what your talking about! QUOTE]



I thought you couldn't issue a balloon note for owner occupied single family residence. Adjustable yes. Balloon? No.

I remember uncovering over a dozen of these ballons where the homeowner was only paying interest and the full amount of the loan was due at the end of the term. The problem was convincing them that they had this type of a loan. Most were in a house way bigger and cost more than they could afford.
Should have been illegal for the banks to issue these loans, but wasn't....Maybe things are different now?

Actually there were only a few we could help or wanted help. Most of them didn't qualify for a better loan. Either they didn't make enough $$$ to qualify or their credit was so screwed up they couldn't get any thing better. Some just didn't want the higher payment and said they would deal with it later. Sad...I couldn't imagine paying on something for 15-20 years only to owe the same amount as what I originally paid for it?

 

[Jimmy Buffett]

Actually it was illegal for banks to NOT make that kind of loan. Barney Frank felt that it wasn't fair that only people who were able to repay should be able to borrow money. So the threatened to yank the banks charter if the didn't make them. Hard to figure how we could be in a financial crisis...