The popularity of "exotic mortgages" has the media in a feeding frenzy that the lenders are creating the much bemoaned real estate bubble.
If there is a bubble Cheap Dan Bailey Jersey , it has less to do with financing than with stories of fast riches in hot real estate markets. Yes, the easy money loans have helped some borrowers buy beyond their means. And yes Cheap Brett Jones Jersey , the exotic loans can act as timebombs when rates spike higher. But the loans are no more the cause of a speculative real estate bubble than a better golf club helps Tiger break par. They are simply tools.
I beleive the exotic loans are good tools for borrowers who know how to use them. Interest only payments allow a borrower to pay a smaller payment when cash flow is low, and pay down principal in better times. These loans actually reduce the risk of loan default Cheap Danielle Hunter Jersey , because default only happens when a borrower can't make their monthly payment.
Therefore any loan that allow this kind of payment flexibility should be seen as a positive for loan quality and stability, not riskier?
Along this same line of reason Cheap Eric Kendricks Jersey , an Option ARM - or the extra hybrid, negative amortizing Cheap Trae Waynes Jersey , low payment loan is even more secure. Option ARMs allow a borrower to pay even less than the interest accrual on the loan, with the difference being added to the princiapl. Paying these uber-low rates is even easier on the borrowers monthly cash flow Cheap Laquon Treadwell Jersey , so the default risk is further reduced. If interest rates spike, the payment does not change Cheap Ben Gedeon Jersey , a minimum payment is locked in for several years.
The experts and the media are having a field day with these loans, and few industry insiders have been defending the popularity of the products.
The consumer clearly understands the value to interest only and exotic payment mortgages Cheap Dalvin Cook Jersey , this is why they have become the most popular loan options. But few consumers are being interviewed to defend why they choose these loans. Why the media witch hunt?
Simple, the headlines of a real estate bubble is much more exciting than writing about how new innovations in lending are helping Americans afford the Dream better.
There was a day when we gave people our business through a sense of loyalty.
This loyalty was earned as repayment for a repeated positive experience Cheap Mike Hughes Jersey ,
We are prepared to put up with the occasional lapse in the level of service we receive if we know that the overall intent is to provide us with what we want and that the normal level of service does provide us with exactly that.
That was in the good old days when we could make the assumption that the service provider was in business to provide a service.
Those were the good old days indeed.
When the bank manager could look at your plans for expansion and give you what you needed because he knew you and was able to be loyal to his customers.
When you kept the same credit card in your wallet for years because you thought that you had built up a relationship with the company.
It comes as a rude shock today when you need to stretch your resources and in the face of a twenty year relationship discover that your loyalty counts for nothing.
It comes as an even ruder shock to find that the bank manager is desperate to help but is prevented by the rules of the bank that he now finds himself shackled to.
The bank manager became a bank manager by working his way through a business that essentially made money by helping other people to make money.
By gaining experience and understanding he progresses to the point where his personal influence can be seen to be helping his customers to make more money.
Then the bank changed the rules.
Now his job is to apply the rules without any latitude at all.
All his accumulated knowledge and experience counts for nothing as the ability to make a decision is taken away from him.
From being a respected autonomous figure he finds himself relegated to applying a set of rules that encouraged him to give inappropriate loans in order to meet the targets set by the bank and not allowed to give help in situations where he knows that his ability to do so would give someone who deserved it the space they need to breathe.
Is it any wonder that the bank manager becomes disillusioned and goes forth to seek out pastures new where he is allowed to use his experience to add value and be more than a none thinking clerk.
The bank mangers as a consequence leave their positions before they have completed the full term with the result that their successor is put into post before gaining the full experience that they need.
But now that doesn't really matter because under the new rules we no longer need the same level of experience to be a bank manager.
The new manager just has to follow the rules.
This is fine for a while but blindly following a set of rules soon palls and once again the manager moves on.
Each subsequent manager is therefore less able to be the manager that we all grew up to respect and work with, until the person who becomes the new long term manager is the sort of person who has grown up not being required to think and is therefore comfortable in a non thinking role and is probably even envied by his peers who are still working for MacDonalds.
We are not taking a pop at bank managers here but the environment that has created this need to withdraw the ability to think from the workforce.
The same pattern is repeated in call centres.
Call centres used to be populated with individuals with a certain amount of expertise in their field to whom it appealed to be able to help people who were having difficulty.
A natural human desire to help.
And then the rules were changed.
Instead of the help line being there to help and at the same time give the operator job satisfaction when that help was given Cheap Anthony Barr Jersey , the rules now say that the object of the help line is to process callers in a given time.
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20.12.2019 07:21
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