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The NINJAs Are Back: Buy Life Insurance, Get A No Doc Mortgage Loan For Free
First we got GM subprime interest-free car loans, then we got subprime ABS securitizations, then we got soaring student loan defaults and delinquencies, then we got the opportunity to sell and short student loan exposure, and now, finally, the credit bubble is complete as FastFunds Financial Corporation is proud to announce that it has acquired exclusive mortgage servicing rights for an "Innovative New Mortgage Product." Why is it so innovative? Because it requires no credit verification, no credit history, no docs and needs no personal guarantees. In other words, it is the very worst of the worst lending practices we saw in 2006: the NINJA.
But there is a twist: "all that is required to qualify for a mortgage loan is qualifying for a life insurance policy, a down payment that usually amounts to 10% of the purchase price and verification that the borrower has the financial ability to pay the monthly payments."
In other words: buy life insurance, get a subprime, no doc mortgage for free.
Ye olde days are truly back.
From the FastFund credit bubble peak press release:
NET LIFE is a development stage enterprise that has developed and is offering an innovative new mortgage product that is not based on credit history (no doc) or personal guarantees. It is only secured by the underlying collateral and a life insurance policy on the borrower. Therefore, all that is required to qualify for a mortgage loan is qualifying for a life insurance policy, a down payment that usually amounts to 10% of the purchase price and verification that the borrower has the financial ability to pay the monthly payments. NET LIFE believes this mortgage product will be attractive to a wide spectrum of potential borrowers including:
- first time homebuyers;
- borrowers who have experienced prior financial difficulties such as foreclosures, bankruptcies, late payments or credit problems; are presently employed and whose current income would qualify for a mortgage loan; but who couldn't otherwise qualify; and
- borrowers who may wish to bypass the traditional paperwork involved in the typical underwriting process but who would otherwise qualify.
Since its formation in 2012, NET LIFE has completed development of its mortgage product and conducted testing via a limited number of successful closings. NET LIFE is now developing plans for a national launch of its product line.
"We are excited to be on the forefront of launching this exciting new product and especially being on the servicing side where we can gain substantial benefit without the risk associated with traditional mortgage underwriting," stated Barry Hollander, acting Chief Executive Officer of FastFunds.
* * *
We, on the other hand, are just as excited to sit back and watch how this time the most speculatcular credit bubble ever created with the full complicity of every central banker in the world "will be different" and have a different outcome than the last time...
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If you don't pay do they just kill you and collect on the insurance?
And sell your organs on the black market.
"Dope credit" (aka "credit crack") expansion is an essential, critical component of Bernanke's continued "reflation of spectular asset bubble classes recovery plan," which is all part of the historical track record of central reserve fractional fiat banks "old standby" game plan of blowing & enticing "investors" to chase said bubbles.
Modern Monetary Mechanics (Modern Monetary Theory simplified) = When an economy no longer produces net-positive incremental units of productive value, kick the can by inflating & reflating alternative asset classes to batshit crazy levels, and sometimes, as in the current period, inflate nearly every asset class imaginable to batshit crazy levels, simultaneously, by punching The Easy Button that the Fed uses to monetize debt/print fiat.
All's well that ends well, and for that which ends badly, well...
This'll be great!! Once Fannie and Freddie have their love child, we can get it to do the mortgage and AIG to handle the life insurance..........ahhhhhh, memories.........
Next we get robo-contract killing as Net Life tries to get all its money back through life insurance policies ?
Obozo the President Clown is going to fucking drone you if you don't pay up!
P.S. This whole thing (student debt, ninja debt (is that redundant?), stawks, etc.) blows up right before Obozo leaves the House.
Drones are too obvious. Government runs the healthcare system, which has the means of "liquidating" "non-performing"Government backed lending, wherein one is worth more dead than alive. Since Government courts will adjudicate the entire process, I suppose everything is within the realm of possibilities.
What could go wrong?
Big news story about antibiotic-resistant bacteria comes out at the same time. Coincidence??
Right after, because then it will be blamed on the Republican(s).
But who is the "Baby Daddy"?
Where is 60 minutes? Why not send in an illegal immigrant, working as a dishwasher, etc and get them to apply for a mortgage....and video the whole process? OH,. forgot, they are too busy dealing with important stuff.
>>game plan of blowing & enticing "investors" to chase said bubbles<<
http://www.youtube.com/watch?v=ZR04C-Y0kS4
Whoever originally posted that link is a genius.
EZ-Credit (zero down, no doc stuff) is the sine qua non of Bubbles. The system is alreayd in place for keeping any profits and then Fast & Furiously passing all losses onto innocent society.
No no no... it's not like that. Barry is legit. And a big kahuna in Chinese solar energy apparently...
http://www.forbes.com/profile/barry-hollander/
Its all in the fine print.
My first thought.
If only those pesky property taxes would go away, how booming the mortgage market would be. The fed needs to get on that, stat... please
http://www.youtube.com/watch?v=BX-7BlRc_a0
Dude get real,
My first thought.
If only those pesky property taxes would go away, how booming the mortgage market would be. The fed needs to get on that, stat... please
The next step to raising taxes is DISALLOWING the home mort int deduction, and charitable donations!!!!!!!!!!.
Besides, if they did away with those taxes, when it was paind off, you would OWN it...............no right to own property in the USA anymore.
They should wrap up your burial plot and casket in with the deal for a complete package...The rest of your life mortgage .....Never worry about where you will find rest again.
I'm gonna buy be a house w/ 3% down - thanks FHA! - lever that motherfucker for all it's worth, get me all the physical gold I can carry, and the rest of the world can kiss my ass....
Even better, I just got a VA loan with 0% down, no PIM and its even secured with your tax dollars. HA HA!
Just my opinion, but if you served in a combat zone- you deserve it.
volunteering to do the dirty work for the banks and big oil doesn't earn anyone anything other than scorn and it sure as shit shouldn't give a person priority when it comes to getting a job or getting a mortgage.
I would buy what you're selling here if the mercs were paid a fair market rate for their services. As it stands presently, it's pretty close to indentured servitude.
And as I read this, I thought to myself there "Should be a law against this" and dont we have regulators who Police this shit. Then I wiped the shit of my ass, laughed and flushed.
Thus endith the lesson.
Shit either floats or sinks. but you can bet it stinks.
Your welcome!
I'm sure these life insurers are choking to death on zirp. They will gladly take your premium today to buy themselves another 5 minutes of existence.
You ain't just kidding with that comment, Fonz. There are life insurance policies blowing up all over the place right now (expected returns not paying for the premium increases as people get older, to over-simplify the situation).
My father (73) had his "hit the wall" this year. Payments went from $600 to $850 and were expected to be $1200 by 2014. I asked him, pretty please with sugar on top, to find the original projections from when he bought the policy in the late 80s..... just so I could show my clients how these things can go horribly wrong vs. the serious-looking "projections" that are, in fact, nothing more than sales propoganda. He couldn't find it, unfortunately. I would have paid his premimum for the next year if he could have!
Those projections are always built on unrealistic return expectations, but some of them are REAL whoppers. Like 11% CAGR. Can you imagine? Run the same projection on a 2% CAGR (which just about covers the M&E fees)..... it's so bad you can't do anything but laugh.
If you REALLY want to leave something for your next of kin, take what you would have paid for the policy and buy some gold every month. Bury it under the basement floor and leave a note where to find it with you will. If you're so far in debt you can't afford that then you've got nothing to give anyway. At least they can't make next of kin assum their parent's debts (yet)!
Very true. Heads they win, tails you lose.
The criminal oligarchs win every time, yet soooo many people hang on to the psy-op false narrative that they are stupid.
People, if they were stupid, they'd be broke or in jail for a fraudulent monetary system, and all the millions of crimes that surround it, instead of citizens being broke and in jail for petty chit.
Debt Money Tyranny
http://www.keepandshare.com/doc/4768883/debtmoneytyranny-6-1-pdf-60k?dn=y
solid posts Fonz and ND. Thanks.
Insurance companies are the greatest ponzi scheme ever. Buy a million dollar policy with premiums locked in for 20 years. Pocket the premiums from all the sheeple, lever up that balance sheet 50x and when a million dollars loses 50% of its value in 20 years and you're still alive, we'll jack up the rates to adjust for inflation. You're better off dead. Gotta love capitalism. Sigh.
10% down. Verified income. Life insurance as collateral probably means a whole life policy which likely amounts to another mortgage payment. You will be paying for this credit much more than even the average subprimer would pay if rates were just set fairly. It's like paying $175 to get a $200 credit limit CC. The lender assumes little risk and reams the borrower on the interest rate.
But, but, but you can take out a HELOC as soon as the house prices bounce up and that pays for the insurance premiums by itself. Live for free, here we are again.
No, this is worse than that. This is a version of Credit Life Insurance (decreasing benefit term life). It's where YOU pay to insure SOMEBODY ELSE. It's possibly the most mind-fuckingingly bad insurance product ever conceived. Can you imagine paying for a life insurance policy to cover somebody else's risk (in this case the lender on your mortgage)? That's credit life insurance.
It's often used to suck money out of stupid people who buy things on credit cards, or finance a car, etc. Never seen it applied to a mortgage before now, though.
At least with whole life you can just pay the first payment and walk away from it (insurance policies are UNILATERAL contracts- only the insurance company must live up to their side of the contract- you can stop paying any time you like and the only thing that can happen to you is the policy is cancelled). In this case I bet the insurance is "bundled" with the mortgage payment so you can NEVER cancel it. You'll pay for it the ENTIRE TIME YOU HAVE THE MORTGAGE. Considering it's likely a 30 year mortgage..... well, it would be the payment on a 30 year decreasing benfit term policy (face value based on the amount owed on the mortgage day 1) slapped right on top of the "normal" mortgage payent.
This is an insurance product that's so bad, they considered outlawing them. It simply does not benefit the person paying for it, is the basic problem. Now they took that productfrom 4-5 year car loans and put them on 30 year mortgages. Un-fucking-believable.
Short version: Not only is the mortgage on your house already secured by the physical asset itself (the house, as it has been forever), but they are going to make you PAY MORE for mandatory insurance on the mortgage on that house. This is an incredible ass-ramming with no lube for anyone who signs up for one of these voluntary financial screw jobs.
Oh, and just so you know, if you default on the mortgage payment the insurance is automatically cancelled (that's the nature of Credit Life Insurance). Which is probably why they are doing this in the first place- they'll never pay off. Miss a payment and the insurance company is off the hook. You just payed the insurance premium all those months/years for nothing. Just when you need it most, it evaporates like a fart in the wind.
Your post is the vodka in this potato of a story by the way!
Double Indemnity!
A new way for Bernankers to be evil, just when it looked like there were no more.
Plus, the mortgage includes a pre-paid funeral as a signing bonus.
We are in a bigger credit bubble. We all know what Bernanke will do if the bubble shows the slightest sign of deflating. BUT gold and silver are still in a coma and don't any sign of life. What a tragedy!
It;s all a matter of time and the human perception of time. Silver sold for $4.35 an oz. in 2001, and then went back down and sold for $4.35oz. again; in 2002; what could possibly be a worse investment? When you're an electronic engineer you spend a lot a time looking at Oscilloscope traces; the machine has a knob on it for the time line of the horozontal axis; if turn it one way you see a rising curve; it's a rally!; if you turn it a bit more you see a falling curve; it's a bear market!; if you turn it again you see a wave going up and down. There are fundamentals they exist. they have not been eliminated. Reality has not been eliminated. The best feeling in the investment world is to know that the underlying reality is on your side; because reality is a bitch and it kicks everyones ass who drifts off into make-believe land. No tragedy; just human folly; standard operating procedure. Reality will arrive and sweep alll the make believers into the waste basket.
That argument is perhaps better applied to gold, unless something like graphene pans out. Silver is like rocket fuel on steroids if we ever come to understand its role in electrical energy extraction from our environment, because, rocket fuel expends itself delivering energy. Silver will remain a simple-life tool, an artisan's medium, medicinal asset, and really, it's just better than green toilet paper.
Sure the value of silver goes back down, but then again, the value of the life of an American citizen has dropped to new lows it would appear as well. Well, it's not the koolaid of choice in our current cult paradigm, but then again, it makes a damn fine mirror in the smoke, now, don't it? By the way, the machine your Oscope is hooked up to is flatlining if you ever go back to the old gains. You might get a better readout if you had silver probes.
borrowers who may wish to bypass the traditional paperwork involved in the typical underwriting process but who would otherwise qualify.
And the life insurance policy isn't the underwrite?
Hell, when this thing blows up again, lawyers will have a field day.
Obama!
If you can fog a mirror a life insurer will take your premium today. Their actuaries have figured out that they won't be around when you submit your claim.
So what happens if the buyer drops dead? The lender gets the life insurance and writes the mortgage off?
That's an a-grade scam right there.
my point is the insurer is betting you stick around for a few more years....which will probably be a few more years then they will. Their bond portfolio's have been maturing and as they are forced to buy new bonds at these rates I would not be surprised if they end up in ponzi mode taking new premium in and immediately applying it to higher rates they guaranteed on old polocies and cannot find in the market today.
Insurers don't get that freshly printed QE money to roll around in. They are probably on life support right now (no pun intended).
If too many people start dropping dead today either they start denying claims and go the shenanigens route or they are toast.
You are spot on Fonz. They know they won't be making good on these products. Hell they can't hedge what they have now. They are trying to do everything they can to either buy out policies or terminate more contributions.
It sounds like a Reggie Middleton special. I have been waiting for him to be all over this. Maybe he is?
The mortgage is paid of and the best part? They still own the property as they were the underwriter and the person who secured the property is now deceased.
You don't think they'd actually let the property pass to the next of kin, do you?
Not that it's not already important, but I'd love to read the fine print on one of these agreements.
Seems like a fair deal, Miss a payent you get whacked.
By one of those mini-drones. If it was during black fly season, we would never know the difference up here in Maine!
Three cheers for Bernanke for proving that 2008 was the aberration and making everything normal again.
Fucking idiot.
The sad thing is Wallstreet will find enough people who that are willing to be separated from their money who will buy this product.
.
I wouldn't be surprised.
Would selling my bad kidney, the hippy foam pissing one, get me a remodel finance on my winter worn out spruce strapping and blue tarp Obamaville hovel? I'd like to move in a new normal skank , but lately I've been losing the to the Winnebago rich fuks.
Looks to me the desperation of a fool of an industry trying to prop itself up at all cost and using what ever it can find as collateral. May all life insurers and mortgage swindlers burn in hell for eternity!!!!!!!
SNAP cards count as earnings.
We're about 12 months away from a new round of "Cash For Clunkers"... Why doesn't someone call the MSM shills out on this crap when they are joyously bloviating about how strong new mortgages and car sales are every week?
Do they provide low interest financing to purchase this fine new product? ;-)
Deleted - best post yet
This is probably a loophole introduced in the fannie/freddie merger wind down. They will exit the custodial market for traditional mortgages but they get re-chartered for this rubbish. Never underestimate the braintrust in the only part of the country with a strong housing market.
makes sense, in debt based monetary system they got no choice.
Fucking Hell ... Only in America
LoL
I guess this means Blackwater is going into the Debt Collection Business.
Look at the bright side: No more annoying phone calls...just a quick bullet to the back of the head and all your debts are paid.
Rule #1. Never be worth more dead than alive.
Hilarious and spot on, Seasmoke. That's my #1 rule when living in SE Asia.
Rule #2: Never show your wealth.
Rule #3: Never compete with the locals (never take jobs from them)
Looks like "Dead Peasants" insurance is back!
Talk about the money laundering opportunity of a lifetime. One only has to qualify for the life insurance policy and prove they can make the mortgage payment. The Chinese are already building a human bridge over the Pacific.
And of course when all goes bad The Bernank will be there to bail out all the big players again for at least twice the amount of the original TARP. But all is well since the market is at new highs. This is just getting stupid...again.
BTFD.
Where do I sign up?.............. sooner the better.
It is rumored that the Bernank has already pre-ordered $1T worth of the MBS these loans will generate. He was overheard muttering something about how this sure beat the shit out of that platinum coin idea.
Finally I'm in. Home sweet home here I come. A student loan, a homey or two and I'll have my own bunga bunga. Maybe a little left over to BTFD.
...mustn't... permit... money supply to ....decrease....ungh....
It'll all cancel out at the end, ya see...really.
I like it. Banks can resolve deadbeat loans by killing the borrower and collecting the life insurance.
Drone strikes Baby!
This isn't nearly as radical as the article (mis)portrays it. 10% down is not something broke people have laying around typically. Also, there is no mention as to what the DTI is on this loan. There's a huge difference between say 32% DTI v 50% DTI.
Attempting to equate this with a NINA (no income, no asset loan) is absurd. Down payment (10%), and ability to repay (verification of income - how is that NO DOC?) are not inconsequential. If it was your money at risk, what terms would you prefer? A NINA with only a credit score, or 10% down with verification of income? Still, I think there's more to the loan than what's listed.
I'm not saying that this isn't riskier than a conventional loan or that no borrowers will ever end up in foreclosure, but the THERE'S A PULSE. GIVE EM ALL THE MONEY REQUESTED implication of the article is erroneous.
There's a reason for niche products. Not everybody fits into the w-2 wage slave mold. There are lots of self-employed people who make sufficient money to buy a home, but depending upon the type and amount of income and deductions, they may or may not qualify to buy a house based upon the conventional underwriting guidelines for income calculation.
Also, I wouldn't count on the insurance premiums being a negligible amount. If there's any business that analyzes numbers ad nauseum, it's the insurance industry, and as long as the company sinks or swims on its own and isn't backstopped by the government, then more power to them. Just my 2 cents.
Your 2 cents added to the salary Goldman Sachs pays you should buy you a nice country in the Southern Hemisphere. Fuck off!
GS salary? No thanks. I work for myself and have been in the mortgage business for many years. I was just pointing out the problems with this poorly written piece and flat out incorrect assumptions as well as contradictory assertions, e.g. calling the loan "no doc" when there will clearly be a verification of employment (documentation).
I'm a proponent of free markets, and if a company wants to provide a service, and is willing to reap the benefits or suffer the losses and go out of business without expecting the government to bail it out or prop it up, then I'm all for it. More choices are a net benefit to consumers.
If I said something that wasn't true, or if you have a contrary opinion, it's usually more constructive to express your thoughts in an attempt to refute or persuade.
"Also, I wouldn't count on the insurance premiums being a negligible amount. If there's any business that analyzes numbers ad nauseum, it's the insurance industry, and as long as the company sinks or swims on its own and isn't backstopped by the government, then more power to them. Just my 2 cents"
Clearly you do not understand the dire straits the insurance companies find themselves in. Zirp is killing them right now and they can't currently hedge for existing products,let alone charge enough for future products; Consumers are waking away. The insurance companies are grasping for premiums now knowing they won't have to honor them in the future. Whoever gets suckers into buying these loans are going to find themselves on the short end of the stick again.
"The insurance companies are grasping for premiums now knowing they won't have to honor them in the future."
The article is not about insurance companies in general, but rather, a specific product from a specific company. Enough with the ex cathedra pronouncements. If you want to assert this position, then it would behoove you to provide specific evidence about the company.
"Whoever gets suckers into buying these loans are going to find themselves on the short end of the stick again."
Again, ex cathedra pronouncement. How do you know whether or not the product will be sold to an investor or held in portfolio? From the article, you don't. Don't you think this is an important point not addressed? If the loans are held in portfolio and turn out to be bad, then Net Life is the entity taking the losses, NOT some third party purchaser (who doesn't exist in a portfolio scenario). As I pointed out above, this is a poorly written article.
"We have arrived at our destination. Please allow the banker at the disembarkation platform to sodimize your children, after which you should surrender, to him, all money and valuables you have brought on your journey. Smile. Have a nice day."
Well, all you can hope for is that they fail as a business and can't sell this "product". What a world we live in.
That 10% down is likely to be a stumbling block (except that is probably financed, too.)
Economy does not work, bubbles only!
That 10% down is likely to be a stumbling block (except that is probably financed, too.)
Economy does not work, bubbles only!
No kidding, can you imagine what the costs would be to you, after you bought a NEW home?.
Everyone here but likely the young have, and it's a frigging money PIT!!!!!
Speaking of ninjas, the Tokyo High Court has officially certified the nation as a Banana Republic.
http://e.nikkei.com/e/fr/tnks/Nni20130306D06JF786.htm
"HSBC Sells U.S. Consumer, Homeowner Debt for $3.2 Billion"
http://www.bloomberg.com/news/2013-03-05/hsbc-to-sell-u-s-consumer-homeo...
"The book value of the assets being sold was about $3.4 billion at the end of 2012, HSBC said.
“They are taking a loss on this, but it’s not a very big one,” said Simon Maughan, an analyst at Olivetree Securities Ltd. in London. “It’s a good deal because it frees up capital that would otherwise be tied up backing loans.”"
Too late, no one has any money. They can't afford the 10%.
This won't have a chance to burst, we're already at that point.
This is mortage life insurance. It's not new. Zero hedge please dig a little deeper.
http://en.wikipedia.org/wiki/Mortgage_life_insurance
I guess if you don't pay they can kill you for the life insurance - and this probably involves real Ninjas.
There is more than one sucker born everyday, and the proof is the fact that newly created ponzi's such as this one are even allowed to advertize, more less collect fees legalgy. It's pitiful, simply pitiful!
It was just a ninja loan until the holder drone release memo...
I sure wish I could buy a life insurance policy on that bonehead kid next street over who loves to drink and drive...
Why can't we have some 'innovative financial surety instruments' like that?
Buy the insurance and send him a case of booze...
Green shoots, ya know?
In the 19th century Netherlands one could have taken out life insurance on others. A woman named Maria Swanenburg took out insurance on over a hundred people and then poisoned 90 of them to death. She made a real killing that way!
Unfortunately for her she got found out and was sent to jail for life. Today she probably would have been hired by Goldman Sachs or JPMorgan.
http://en.wikipedia.org/wiki/Maria_Swanenburg
Seems like a good idea, but a LOT of the folks who were expecting to make a killing on the life-insurance policies of all the AIDS-infected folks back in the late '90s are way pissed these days.
So...NINJA dead-peasant insurance?