| 
 enlarge | Author: Richard Bitner
Publisher: Wiley
Category: Book
List Price: $19.95
Buy New: $10.70
You Save: $9.25 (46%)
New (43) Used (11) from $10.70
Rating:  32 reviews
Sales Rank: 36121
Format: Illustrated
Media: Paperback
Edition: illustrated edition
Number Of Items: 1
Pages: 208
Shipping Weight (lbs): 0.6
Dimensions (in): 8.9 x 6 x 0.6
ISBN: 0470402199
Dewey Decimal Number: 332.7220973
EAN: 9780470402191
ASIN: 0470402199
Publication Date: June 30, 2008
Availability: Usually ships in 1-2 business days
Shipping: International shipping available
Condition: Brand New, Perfect Condition, Please allow 4-14 business days for delivery. 100% Money Back Guarantee, Over 1,000,000 customers served.
|
| Customer Reviews:
 Good Insights! July 27, 2008
The value of Bitner's book is that it helps readers understand the players and their roles in today's subprime mortgage mess.
When a mortgage broker commits fraud, the lender must prove it to make the broker buy the loan back - hard to do legally, requires a long time, and usually they don't have enough capital to do so. Thus, lenders usually simply cut fraud-perpetrating brokers off from future business. An investor (big buyer of mortgages) only needs proof that fraud has occurred to force the originating lender to buy it back. Eventually, Bitner found over 70% of brokered loan applications submitted to his firm were somehow deceptive - thus, everything needed to be double-checked. The greater the number of new mortgage brokers, the greater the number of problems.
Good brokers can locate the best product and price to meet a borrower's needs; however, they have little control over the loan process, add steps to the process, and are largely unregulated.
Sub-prime borrowers' main concern is getting approved. This leads to being advised (legitimately) to not talk to competing brokers because their pulling the borrower's credit report lowers their rating and chances of getting the loan. The process of obtaining a home loan, especially for a first-time borrower, is also emotionally draining, thus providing further incentive for subprime borrowers to stick with a single broker. However, if the broker only presents a single offer, the stage is set for taking advantage of such borrower.
Brokers originated 25% of prime loans in 2003, and over 50% of subprime loans. The disparity is because direct lenders usually win a price war involving brokers, while there are over 100 wholesale subprime lenders available for subprime borrowers to consider.
Common Subprime Fraud Problems: 1)Borrower indicates he'll occupy a property when actually purchasing it as an investment. 2)Falsifying employment history via friends or relatives. 3)Omitting critical information - eg. another property owned that is in default. 4)False information - eg. increased number of credit lines, excluding selected reporting agencies, providing old credit reports, inappropriate selection of "comparable" properties.
Rating agencies generate about three times the fee rates from mortgage securities vs. corporate bonds; in either case, they incur no liabilities, thanks to 100-some pages of disclaimers. Only a handful of non-financial corporations get the highest AAA ratings on their bonds, while almost 90% of mortgage obligations did so.
Subprime Growth Keys: 1)S&P concluded in 2000 that taking out a second loan in lieu of providing a down payment was no more likely to default. Others followed; reversed this policy in 2006. 2)Loosened lending standards. 3)Interest-rate drops led to rising home values, increased motivation to buy or refinance, and looser lending standards. 4)Allowing borrowers (especially in Las Vegas and Miami) to buy multiple properties.
Bitner's Recommendations: License brokers, clearly define the terms that must be disclosed in a mortgage, assign appraisers randomly or require they be chosen from a specified list, and restrict the severity of ARMs resetting.
 Good, not great, and self-serving. July 26, 2008
20 out of 20 found this review helpful
Wow(!), there sure are a lot of reviews here that make this book sound like the definitive work for explaining the mortgage meltdown. I'm not the smartest bulb in the room (at all) when it comes to this kind of stuff, but I found I knew most of what was discussed in the book before I read it. To be sure, it's an easy read (of the lazy summer weekend kind) and a fun one (lots of incompetent borrowers, sleazy brokers and greedy investors - this is mostly an anecdotal book), and it does a pretty good job of simplifiying things, but in the end, I was disappointed. Worth the money and the time, but less substance than I expected.
The thing that irked me the most is that Bitner REALLY lets himself (and to a large degree, other lenders) off the hook here. Oh sure, in the end he says he blames himself too, and 'gee gosh', he should have known better, but I never get the impression he really means it or takes any real responsibility. Of all the institutions and people he blames for this mortgage mess, he makes it sound as if his group is the least culpable,- caught between crooked brokers and greedy investors. I just don't buy it. In the end, he's too self-serving, and trying to have it both ways. I get the impression he wants the reader to feel sorry for him, and I don't.
While I appreciate the fact that he did write this rather light examination of the subprime industry, I can't get past the fact that he made lots and lots of money exploiting the system, as he exploits the mess now by selling a book about it. And all the time, there are a lot of folks who have been screwed and thier lives turned upside down, partially because of his actions.
In the end, all of us are paying and will continue to pay for his (and of course, many others') unethical behavior.
Doesn't sound to me like he's changed; he's just found another angle.
Very good introduction to the topic, but a few things missing July 16, 2008
This book provides an excellent overview of the subprime problem. If you're interested in knowing about the different parties involved in the mess and the role each one played in the ultimate outcome, this is a good starting point.
I would have liked to have seen a bit more discussion about the specifics of how larger banks can be affected by the problem, since that is one of the main concerns of the current crisis. Much of the in-depth discussion is focused on the end of the business closer to the customers -- brokers, appraisers, and lenders. There is some discussion about the role investors, agencies, and investment banks play, but it's relatively minor.
Fantastic July 16, 2008
0 out of 1 found this review helpful
The best book I've read in a long, long time. This should be required reading for EVERYONE in public office. You should not be allowed to utter a single word on the mortgage crisis until you've read this book.
Liked it, but a tad culpable July 9, 2008
2 out of 4 found this review helpful
The subprime biz has been around, or at least WAS around, for a couple of decades now. I enjoyed the book but also being in the business for twenty years I knew all of what Bitner was writing about.
The subprime decline didn't have to happen. Those in the subprime business knew the risk threshold as they kept lower qualifying guidelines but also saw the huge profits they could gather. Forget the money the broker made, some of these packages yielded 107 for the wholesale lender when sold. It's easy to turn your head if you're so inclined.
Those who have been in the subprime business for any length of time knew that the hammer would come down and hard, it's just that some of them knew when to cash in their chips and move on. Interestingly, Bill Dallas, the king of "know when to sell" was a casualty. Perhaps this book is some sort of confession to atone for financial sins.
Buy the book if you want to know the "retail" side of the business, but not much depth when it goes beyond that point. If you're in the mortgage industry, especially if you're a loan officer, this will give you some behind the scenes details you wouldn't know about. I read this book in about 3 hours and couldn't put it down.
|
|
|
