Is it just me or doesn’t it seem that “recovery” should actually begin with us recovering some relative level of sanity. Case in point: why would Denver waste money and space (and reputation, perhaps) with the booth above at last month’s The People’s Fair? Is there not something wrong with this picture?
‘Nother case in point: today’s lead story in an industry trade rag “A quirky dynamic is at play these days at the government-sponsored enterprises (GSEs)—borrower scrutiny is at an all-time high, even as credit conditions begin to loosen…” GSEs = the much maligned Fannie Mae and Freddie Mac, now in some form of receivership. So, no joke, the INTEREST ONLY loan is back with these bailout-sucking responsibility-shirkers. What’s the definition of insanity? Hum.
“We learned that borrowers were willing to pay a little extra for more options, so we enhanced the CME product by increasing flexibility,” says David Brickman, vice president of multifamily CMBS and capital markets at McLean, Va.-based Freddie Mac.
The company believes that a certain volume of borrowers will gravitate toward the same combination of waiver requests over time. Brickman likens it to pizza—plain cheese pizza was all that was offered initially, with toppings being individually selected. But the company will track which combinations of waivers are most popular, and may offer a pre-packaged option, akin to a meat lovers or veggie pizza.
Yeah, I’ve got your cheese right here.
Funny thing about this new form of borrower scrutiny, it’s not happening in alignment with the Dates and Deadlines in our purchase contracts. No, it’s happening whenever the lender feels like it — whether or not final figures have been verified, docs have been drawn and the closing file has been fully, mutually executed at the closing table. Just last Wednesday I had a residential sale go fully through closing — and after all documents were signed and notarized the lender refused to fund. They blame it on “QC.” Any attorneys want to contact me? Journalists? How’bout a few legislators?
Here’s a crazy idea: what say you we we try a little lender scrutiny once we finally figure out that olives and anchovies won’t fix what’s broke. Yeah, and I’ll take that “to go.”