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Subject:  Re: GA Deal I'm working... Date:  2/19/2006  7:05 AM
Author:  inparadise Number:  7612 of 14302

This deal strikes me as loan sharking. Unsophisticated buyer with bad credit taking on a 1st with 90% LTV (what kind of loan?), a 2nd with neg-am. I know it happens every day but it is not suitable. This is like a stock broker putting someone's life savings into all tech stocks in 1999. You are stretching her to the max, no one should be buying with 100% LTV and neg-am at the peak of the market. I'm trying to see how she is not getting in way over her head, and how you might be using your knowledge of the game to take advantage of her.

When I was younger and more stupid, I took a private mortgage at +2% over the going rate, interest only, balloon after 7 years. With our combined incomes, we could easily afford the mortgage as well as carry the mortgage on the starter house that we rented out, though the deal would not have coincided with the percent debt to income ratio that the lenders adhered to more strictly in that time. Six months later after exH tore the house apart and then decided I would get the total rehab house in the divorce and he would keep the starter home, I would have been stuck without the "loan sharking" of those good people. 100% of my take home pay with 8 exemptions went to pay that mortgage as I fixed up the house to marketability. More than once, as I watched my savings ebb, it was tempting to simply hand over the keys to these people who had released exH from his obligations and allowed me to take on the mortgage personally with just my say so that I could do it. I however had been taught to meet my obligations.

Any amount of financial sacrifice would have been worth getting rid of that particular marriage noose around my neck. Sometimes, this type of loan is the only option, and people are grateful for the opportunity that would otherwise be shut off from them.


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