Reality check: Any lender would have done what you saw at ACORN

[Capn Sunshine]

Look, without casting aspersions on the Banking Industry (they don't need any help) I have to tell you as a long time (former) member of of that auspicious vocation, I didn't see anything that wouldn't have happened in myriad offices coast to coast.

Our people were taught to be color blind, to make no judgments. Just FIND A WAY TO MAKE THAT DEAL. Wall Street's entry into or formerly staid world of very clear guidelines and formulas assured this type of behavior was almost guaranteed.

All we looked for was the cash flow to make the payments and a reasonable valuation on the property. We all found swervy ways around "problems" to make the underwriter accept the loan package.I got a loan once for a CEO serving a short jail term. We just paid up on points for a " non owner occupied" loan. The guys had to make deals; you couldn't afford to argue with what came in th door. Although ( I assume) the kids prostitution thing - they would have asked if they were kidding.

Bottom line, those Acorn reps were doing what goes on in every lenders office in every town in the country.

[bbinacan]

1. Still doesn't make it right. n/t

[Brickbat]

2. Right on.

[The Magistrate]

3. Your Comments Are Appreciated, Captain

[Capn Sunshine]

5. Thank You, sir

I think the ACORN angle of this is overblown. I'm not saying it's right, but it's not atypical.

[The Magistrate]

7. Indeed, Sir; Not Right, But Hardly Atypical

That is a point I have been pressing for some days. Too many are treating this as something unique, and so especially outrageous.

[virgogal]

4. I find that hard to believe----this was a blatant attempt to skew the

facts of an illegal enterprise.

[Capn Sunshine]

6. Imagine that

gee, I wonder how the drug kingpins and mafiosi buy those million dollar homes.

[The Magistrate]

8. I Have Been assured, Captain, They Never Receive Legal Or Accounting Advice from Professionals....

[kelly1mm]

9. cash. well technically a check funded by laundered funds nt

[Capn Sunshine]

11. Not really.

any businessman would rather use OPM . Less capital risk. They don't pay cash; it's a HUGE red flag.

[virgogal]

10. That wasn't the topic under discussion---it was lending practices.

[Capn Sunshine]

13. You misunderstand--they get loans like everybody

There are special constructs to accomodate this, and IIRC Merrill was the bank of choice for over $5 million loans. Often, six would be securitized in special tranches with the cash flow being the most valuable component,often taken by a VP.

[DireStrike]

12. You would think people could find better things to be outraged about

Things that didn't come from the deepest never-dredged corners of the right wing echo chamber...

[anigbrowl]

14. And isn't that exactly the reason we complain about banks etc.?

Leave me out of it please. I'm all for helping people in need, but not helping them do an end-run around HUD or the IRS or whatever.

[wroberts189]

15. knr... I have seen this as well ..when I bought my first house...

Certain things were done to get the loan approved...

But is was not sub-prime .. it was a VA loan and the loan was paid off with a second non-va one to save money (just sign all this paperwork) that was also paid off when we moved.

Third loan ..still paying off on time but same thing. The underwriters "adjusted" things. It was a major lender that has gotten bailout funds.

I hate to say this but sometimes the rules need to be bent a little to help the little guy.. in my case ..after renting for 20 years I was able to finally able to get a house.

[Capn Sunshine]

16. the positive upside

its also done a lot at the high end.