During the house bubble period that led to financial crisis, proof of assets and income were de-emphasized and loans shifted from being fully documented to low documentation then to no documentation. Some effects of the subprime mortgage entailed people having no jobs, no income, and no verification of mortgage required. The loans were informally referred as “liar loans” as they motivated borrowers to become less honest during their loan application processes.The US housing bubble final years saw that took place in 2006 to 2007 witnessed collapsing of mortgage underwriting standards. There is enough proof that the GSEs due to their market power and big size contributed much in policing underwriting by originators which forced underwriters into repurchasing defective loans.
On the other hand, private securitizers remained less effective and aggressive in recovering originators’ losses on behalf of investors. The period likewise witnessed predatory lending where unscrupulous lenders enticed borrowers into engaging with unsound and unsafe loans for unsuitable purposes. Today the menace has affected banks and lending institutions whereby the institutions have tightened their loaning rules and terms by even increasing their interests’ rates. Borrowers have found it easier to seek financial help from other modern kinds of lending and Equities First is one of the companies that have been offering associated services to potential borrowers. With 15 years of giving stock-based loans, Equities First is keen in providing the best services to borrowers in need of alternative lending services.
During recession, a classic bait-and-switch technique was applied by Countrywide Financial, marketing low interest rates for buys interested in home refinancing. The loans were protected by detailed contracts and also swapped by expensive loan products during the closing day. Advertisements stated that 1% or 1.5% of interest rates would be charged, but consumers would be put into ARM (Adjustable Rate Mortgage) where the interests charged would be much higher than that in mortgage systems, hence creating negative amortization. With wide years of experience and good reputation, Equities First still spearheads in providing clients with stock loans which are affordable and easier to apply.
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