July 15, 2007

You Know You’re Subprime When?

Readers reacted to this thread on a brokers forum for a weekend topic. “Similar to you know your a redneck when? You know your subprime when? The borrower calls in and has a f i c o ( all spelled out) of Four. ‘You know your subprime when? When the Borrower doesnt know there loan amount, interest rate or mortgage payments (no joke i just had one)’”

“‘You spend your closing cost money on a motorcycle 2 days before closing. Happened last fall.’”

“‘You are adding your boarder’s kid’s SSI to the ‘household’ income’”

“‘You are cashing out your equity to go on vacation. Again.’”

One posted, “My favorite so far: your FICO score and total assets are the same number.”

Another liked, “You use ‘there’ for ‘of them,’ and ‘intrest’ for ‘interest.’”

“‘The borrowers’ ‘household income’ incorporates more than 3 individual incomes.’”

“‘The interest rate on the refi is higher than the rate on the existing loan.”

One found this, “Your borrower goes to grab a McD’s meal for the signing, and can’t get it with the first credit card they try.’”

“You knew you were upside down on the first house you bought, so you bought a couple more, just to be sure.”

” From the thread: “You know you have a subprime loan if… Your borrower wants to quit claim his 98 year-old mother-in-law to the property so she can be a co-signer.(happened).’”

“‘Your borrower walks in to your office in his Waffle House uniform and wants a stated income loan.’”

“‘Your borrower asks you if he can (personally) borrow the appraisal money. (HAPPENED!)’”

“‘You pull the borrower’s credit and instead of giving you a report it returns the message ‘Please retain applicant - Law enforcement dispatched’ (No that didn’t really happen but it’s darn funny.)”

“‘When you ask your borrower for his last 2 tax returns he gives you 2001 and 2004 (because he ain’t filed the rest yet).(HAPPENED!)’”

“‘When your borrower calls and asks you to bail him from his foreclosure, but when you pull public records, the house was titled to the bank 6 weeks ago (happened).’”

“‘You know you are a subprime borrower when: You boast of all the miles you’ll get on your creditcard by paying your mortgage with plastic.’”

Another posted, “‘You know you’re a subprime borrower when you think assets are something to be viewed on web porn sites.’”

“‘You know you are a subprime borrower when: The loan officer asks you about your liquid assests on the application and he says, I have 2 6-pack’s of Budweiser in my fridge!’”

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Comment by Colorado Shadow
2007-07-15 13:56:43

You know you are subprime when you use your credit card to speculate in mobile homes; this according to the Denver Post newspaper. They even have an obligatory Foxworthy reference in the article! Snippet from article & link follows:

“Mobile-home millionaire” may sound like part of a Jeff Foxworthy redneck joke routine, but the term defines the aspirations of hundreds of real estate investors.

Mobile homes offer ample opportunity for real estate investors to start small. Many owners of multiple mobile-home parks began by buying a single home. Many did so with a credit card, according to Doug Ottersburg, a New Mexico entrepreneur.


Comment by sd renter
2007-07-15 14:39:42

You know you are subprime when the police show up at your house and you say, “No really officer, I was just try to help that sheep over the fence.”

Comment by arizonadude
2007-07-15 14:52:52

You offer your favorite shotgun as part of the down.

Comment by Chip
2007-07-15 18:41:26

Never happen. Rather live in a tent. Wouldja consider the wife?

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Comment by the_economist
2007-07-15 14:36:33

You claimed your mortgage broker as a dependent on your last tax

Comment by the_economist
2007-07-15 14:38:08

The bank wont let you borrow a pen to fill out the new loan.

Comment by arizonadude
2007-07-15 14:41:57

The lender offers you cologne at the closing.

Comment by mort_fin
2007-07-15 14:38:56

when your next home is a 68 buick

Comment by Its Crazy Credit!
2007-07-16 02:54:27

no too nice… try a 1980 k-car, or a 1985 corolla

Comment by Incredulous
2007-07-15 14:47:31

When your name is Casey Serin.

Comment by rms
2007-07-15 14:50:23

You’re subprime when you vote for a candidate who promises a bail-out.

Comment by Housing Wizard
2007-07-15 14:51:36

You got to be really sub-prime if FHA doesn’t even want you .

You got to be subprime if you went to a seminar to get a free meal and ended up with a condo in Florida .

You got to be a subprime borrower if you take the big screen TV from the builder, but never move in .

You got a be a subprime borrower if your realtor ,lender ,and appraiser is your stepbrother .

You got to know your a subprime borrower if your lawn is as brown as your house .

Comment by Brentwood Man
2007-07-15 14:53:39

Who dose hold MBS? Pension funds? Hedge funds? Chinese Gov.? Saudi? Who wil eventually lose their money?

Comment by Paul
2007-07-15 14:54:18

You know you are a subprime borrower when:

On a refinance when asking about the rate on your “Stated” appraisal program.

Comment by agitated in sd
2007-07-15 15:12:32

when you finally sell your house for what you paid. that’s kismet!

Comment by S-crow
2007-07-15 15:59:55

When your loan officer sitting across the table from us at signing says, “don’t worry, we can refinance you again.”


Comment by CA renter
2007-07-16 01:00:59

Excellent! Something that’s been said over & over these past few years!

Comment by SD_suntaxed
2007-07-15 16:38:39

…When you’ve got apple cider on the stove and cupcakes for your latest Open House that were purchased with funds from your latest trip to the pawn shop.

…When you pull $100K out of your house at 7% to put it into a savings account at 1.7% because you heard that you should “Liberate that equity, now!” (Happened!)

Comment by bradthemod
2007-07-15 16:52:24
Comment by Walker
2007-07-15 17:15:06

My favorite from the broker thread is this:

When you call on the job reference for the investment firm where they make $22k a month and it turns out to be a new age bookstore. (That’s true. I went in and asked the owner if she had any books on magic. / Sure, what do you need. / I need a book that can teach me how to make a bookstore into an investment bank)

Comment by Its Crazy Credit!
2007-07-15 17:26:11

When you smugly ignore any advice to the contrary and go and buy a house at age 25 because rent is just ‘throwing your money away’

Comment by salinasron
2007-07-15 17:38:24

You have bought 2 houses, three new cars, take expensive vacations, trips to LV and sent your kid to college but embezzle over $100K from your employer to do so! When you get caught you think that your employer shouldn’t fire you and you shouldn’t go to jail and that you should be able to get a company retirement. Yep, life in the real world.

Comment by Pondering the Mess
2007-07-15 18:16:45

You know you’re subprime when:

- You believe debt is wealth! And boy, are you wealthy!

- When your dog gets a refinance offer in the mail, you take it since the dog has a better credit score than you.

- Although you’re losing money on each “investment” house, you make up for it in quantity.

- You make the mistake of laughing about your intended mortgage fraud when you finish up with the stated-income loan, the cash-back offers at closing, and so on. Real pros don’t make their fraud so obvious!

- You can buy a house, but your credit is so lousy you can’t buy any furniture for it.

- You really do believe “subprime is contained!”

Comment by Jay_Huhman
2007-07-15 18:41:06

‘You can buy a house, but your credit is so lousy you can’t buy any furniture for it.’

Pondering the Mess, in the 70’s many a friends house had nearly empty rooms as the furniture from the one bedroom was used over the entire house. Gradually, the old furniture was transferred to the basement or to a kid’s room as better pieces were purchased.

Comment by lefantome
2007-07-15 18:33:32

Finally, a little levity on the weekend…… can’t get too serious with 3 years to go! :)

You know you’re subprime when:
Your kids have sewn up all the yard care business in the new neighborhood…. which unfortunately is only your house, because no one else lives there.

You know you’re subprime when:
The neighbors tell you they’ll be out of town for a few weeks, and you hook your 10 foot garden hose up to their faucet and run it into your shower…..and sadly, it’s not even a stretch for the hose.

You know you’re subprime when:
The lender is asking for a second appraisal ….. on your baseball card collection.

Comment by John Law(Duke of Arkansas)
2007-07-15 18:37:00

you know you’re subprime when you’re out of a job!

Rising star humbled by industry collapse
By CHRIS CHURCHILL, Business writer

“Helping people get a loan they don’t qualify for is cool,” Stuart Schultz said.

“Every customer just wants to know what the monthly payment is,” McCarthy said. “We even told people there were no closing costs — but there’s no such thing.”


read the story, there are many quotes that are just unreal.

Comment by aladinsane
2007-07-15 18:48:16

“Helping people get a loan they don’t qualify for is cool,” Stuart Schultz said.



Comment by lost in utah
2007-07-15 18:50:06

Well, not to be picky, but you know you’re subprime when you spell “you’re” as “your.” LOL

Comment by Ben Jones
2007-07-15 19:35:13

thank you for your intrest lost!

Comment by lost in utah
2007-07-15 19:40:52


Comment by arroyogrande
2007-07-15 18:54:07

You Know You are Subprime When…all you need is a 5 point increase to your FICO score to be considered Alt-A.

Comment by Etz3l
2007-07-15 19:02:29

…when the realtor lends you money to deposit in your bank account before filing the application (HAPPENED!)

Comment by lost in utah
2007-07-15 19:03:32

When your own kids tag the outside of the house when you move in.

Comment by arizonadude
2007-07-15 14:40:30

You spent your closing cost money on new teeth for uncle earl.

Comment by arroyogrande
2007-07-15 19:08:19

…when you HAVE TO buy a house because you can’t qualify (income, fico, references) to RENT anything.

Comment by tj & the bear
2007-07-15 19:08:52

So true!!!

Comment by CA renter
2007-07-16 01:12:31


Comment by tj & the bear
2007-07-15 19:08:27

… you brag about the $500K “steal” you got in Compton.

Comment by arizonadude
2007-07-15 14:44:47

You offer your lender a dime bag as gratuity.

Comment by ric
2007-07-15 19:09:03

at least 20% down
monthly PITI no more that 28% of gross income
total debt no more than 3x annual
all on one income

yes to all the above - not subprime
no to any of the above - subprime

Comment by GH
2007-07-15 19:51:53

You mean subprime is much bigger than we “previously thought”?

Comment by HARM
2007-07-16 01:58:56

If this is true, then 99.999% of California likely qualifies as “subprime”.

Comment by AKron
2007-07-16 18:16:46

“at least 20% down
monthly PITI no more that 28% of gross income
total debt no more than 3x annual
all on one income”

That is Alt-A. Subprime refers specifically to the characteristics of the borrower, such as poor FICO score.

Comment by aladinsane
2007-07-15 19:14:13

…you are going to vegas every other week, trying to make the mortgage.

Comment by Spucky
2007-07-15 19:18:36

The Commonwealth of Massachusetts makes you an offer to refinance your subprime loan and forces the lender to eat the difference between what the house was worth when you bought it and what is worth now. Bingo - you win! Not only did you get to furnish the house and go on 3 vacations, now you buy that boat you always wanted. Thank you Governor Patrick!

Comment by palmetto
2007-07-15 19:28:30

“forces the lender to eat the difference between what the house was worth when you bought it and what is worth now.”

Can Mass really do this? I thought they were just offering a fixed rate on the unstable loan.

Comment by az_lender
2007-07-15 20:33:24

If Mass is indeed doing this (abrogating lenders’ contracts), it sort of guarantees that no future out-of-state money will be lent to any Mass homeowner ever. (?)

Comment by David
2007-07-15 20:14:33

Its at the lender’s option. but in many cases its in their interest to get a potential foreclosure off their books.

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Comment by palmetto
2007-07-15 19:22:12

You have to give your sad story to the newspaper through an interpreter.

You say they should never have given you the loan in the first place.

You have a $700,000 house and pick fruit for a living. (What? It happened, remember?)

Comment by palmetto
2007-07-15 19:31:41

You got your mortgage from a company because you liked the little dancing guys and gals boogeying on your computer screen.

Comment by KirkH
2007-07-15 20:03:07

Starbucks flowing through my nose, thanks :)

Comment by Neil
2007-07-15 14:39:08

I’m so glad I didn’t real palmetto’s comment until after I put down my drink. ;)

Got popcorn?

Comment by B. Durbin
2007-07-16 20:56:47

Oh good lord, now I’m imagining how painful it would be to snort popcorn through your nose.

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Comment by mikey
2007-07-15 19:33:34

You know that you are subprime when you attempt to sell your blood and they reject you as a Turnip.

Comment by KIA
2007-07-15 19:42:03

When you rent out the house to a bunch of lowlifes who terrorize the neighbors to the point that they get restraining orders, have the tenants shred the interior, then throw an “eviction party” to get rid of anything that’s left before the sheriff comes. (Happened)

When you take your tenants’ rent payments for a few months during the foreclosure process, don’t tell them about the foreclosure and abscond with the money and their security deposit. (Happened many times recently)

When you visit mom and dad’s, take a casual stroll past your old room and start thinking that their basement might not be so bad after all.

When you start railing and cursing about “the Man” coming to take “your house” which you bought six months ago and have yet to make a single payment for. (Happened)

Comment by tj & the bear
2007-07-15 19:49:09

Your mortgage company is featured on the Implode-O-Meter (which now stands at 99).

Any bets on when 100 hits? I wouldn’t be surprised if it’s tomorrow.

Comment by GH
2007-07-15 19:53:43

Your entire extended family pools their income to qualify

Comment by CentralValley
2007-07-15 15:56:24

Happened to the buyer of my house. Loans docs went from 3 people to 6 people to close the deal.

Comment by KirkH
2007-07-15 20:01:43

… When your loan comes with rust-proofing.

… When your neighbor’s dog dies from malaria due to all of the mosquitoes in your decrepit pool.

… If your mortgage broker is 25 and drives a Hummer

… If you used a HELOC to pay down your credit cards which you use to pay your mortgage.

Comment by lost in utah
2007-07-15 20:05:36

When you’ve never heard of Ben’s blog.

Comment by lost in utah
2007-07-15 20:23:53

When your former home was a 68 Buick.

Comment by snabs
2007-07-15 20:45:57

When the bank calls to verify your employment status a week after you move into your new house. (happened to an old boss.)

Comment by need 2 leave ca
2007-07-15 20:56:06

There are a lot of empty former manufactured home sales places along Central Ave in Albuquerque. So if that is the next hot ‘flipping thing’ (see first post on this thread), then why are the manufactured home sales place closing down? Central Ave is the main E-W and old Rte 66 corridor going from the west to the east end of Albuquerque. These empty shops are on the eastern end of the city.

Comment by FP
2007-07-15 21:15:25

You know that you are subprime when
- you brag on how many times you refi’d your house.
- you believe teaser rates last forever
- you think personal savings is the remaining balance of your credit cards.
- you’ve been had.

Comment by GetStucco
2007-07-15 21:15:59

… when this cartoon is not in the least bit funny, because it hits too close to home…



(Select “Cartoons” then “View the Bliss Collection”, cartoon No. 40)

Comment by Xpovos
2007-07-16 07:40:51

Here’s a quicker link for those less techinically savvy


Comment by steve
2007-07-15 21:45:13

You know that you are subprime when you’ve never heard of the term ‘exploding arm’.

Comment by joeyinCalif
2007-07-15 23:23:13

..when your agent says he can get you a subprime and you tell him to hold the mayo.

Comment by Its Crazy Credit!
2007-07-16 02:56:58

you know you are when your loan was turned down by Ameriquest

Comment by palmetto
2007-07-16 03:36:18


Comment by palmetto
2007-07-16 04:05:07

When your monthly mortgage payment exceeds your monthly income.

When your tale of woe becomes a hit on The Housing Bubble Blog.

Comment by Spucky
2007-07-16 04:14:59

MA is really doing it. They are trying to force the lenders to take 90=95% of the outstanding loan balance to make up for the down market. Nice, huh? My house is on the market and I have already cut the price by 15K and no action. Any more cuts and its down to the 2003 price I paid. Perhaps MA will give me a check for the difference. No wait - I work, pay my bills, put a son through college and grad school, support my church and buy my clothes in thrift shops. I won’t qualify because my FICO score is good Darn!

Comment by Its Crazy Credit!
2007-07-16 14:39:52

it is truly anti-american. the contract is between the lender and buyer. they have no right to interfere

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