Silicon Valley banks offer tech giants' new hires 100% mortgages on 24 hours' notice


#1

Originally published at: http://boingboing.net/2016/07/28/silicon-valley-banks-offer-tec.html


#2

Wasn’t this the premise of The Beverly Hillbillies?


#3

“a no-fly zone for anyone outside technology,”

Nice, what could possibly be wrong with that.


#4

No, they had money. Probably paid cash.

re: the article.

Banks aren’t in the business of stabilizing the housing market. They are in the business to making money on the money lended. So what if they over paid for a house? That means the mortgage payment is higher, and so is the interest amount. Even if the “owner” defaults a few years down the line, they can still make their money back, most likely. Unlike an unsecured loan, they at least have the house even if the deal go south.


#5

No, the Clampetts were actually rich, and paid cash. That was the joke, they were yokels with a lot of money. Now the joke is that these are allegedly smart folks with no money, who are being told they can live like they have a lot of money. When you get a lot of people doing that, you’ve got the setup of a rerun of the Great Bubble of the past decade. Who knows what kind of underwriting standards are being applied–if they’re really processing new employees in 24 hours, I’d guess it’s pretty weak means testing. The main difference between then and now is that this still seems to be local, and not national. But if the market weakens at all, there’s going to be a lot of fucked borrowers out there.


#6

They are probably in the business of making money on the fees and passing the loans to investors. That’s why they don’t really care if the loans are good or not.


#7

Oh jeez, I guess I was thinking about their relationship with the Drysdales’ bank… In fact, now that I think of it there wasn’t much screen time at all given to the pre-closing paperwork, much less the gritty details of the realty business thereabouts…kind of disappointing – but contemporary flipper (not the dolphin) reality TV happily fills the gap for us I suppose.

Maybe it was Squidbillies I was thinking of.


#8

Had we not established the precedent that the taxpayer will be the bagholder of last resort, I doubt this would be happening.


#9

And then, soon enough, “capsule housing” will appear because the region cannot house workers any longer.
Aaaaand then we’ll have some people living in very large houses, and many people living in coin lockers, regardless of their value to society.


#10

This isn’t uncommon. During my job interview my boss offered to let me stay at his home and sleep in his b…oh my god I’m so naïve!


#11

If only the taxpayer were the bag holder of last resort …

:cry:


#12

I could never sleep my way to the top

'Cause my alarm clock always wakes me right up

-TMBG


#13

Not in my region, lots of affordable housing and a reasonably good job market.

But then I don’t live in the San Francisco / Silicon Valley region, whingeing capital of the galaxy.


#14

You were alive and sentient in 2008, right?


#15

I was told this directly by my loan officer when I refi’d my 30-yr to a 15-yr a few years ago (I was curious, and asked him why there were so few roadblocks for me to reduce my eventual interest paid by over $120k by shortening the loan period).

The bank made their money on the transaction fees and face time for potential future business with me.


#16

Well, that was when they got too greedy and it went to shit. But they made a killing before that. The bank owners were just fiinnneeee…


#17

I don’t see the bubble bursting as long as a) far more people want to live here than there’s housing for them (which itself isn’t going to change readily since it’s the South Bay that’s building all the housing, but as a tax-base-poor bedroom community for the rest of the area, it’s becoming resistant to other cities getting the jobs and dumping the housing responsibility on it - also, decades of bad planning are hard to overcome), and b) there’s such huge income disparity. A few years ago you needed minimum $100k income to buy a house, but that must have increased since then. Although that might be a starting salary for certain engineers, and average salaries are higher than the national average (although also inflated by a few super-wealthy tech workers), that’s not a middle class income here. New middle-class house buyers are pretty much already pushed out of the Bay Area and into the Central Valley, etc.


#18

Their relationship with the bank was due to their large balances in their checking/savings accounts.

Which, if you know banking, is both good and bad: a large influx of account money into a single bank legally requires them to lend a percentage of that amount out in commercial and consumer loans. CRA wasn’t in effect then, but there were still a lot of banking regulations (in some ways, more than there are now). It’s not like the account money is income to the bank; they would have had to safeguard the money plus pay interest on the savings portion of it, and only be allowed to invest the money in low risk/low return investments like U.S. bonds. And there weren’t the myriad fees we have now to offset that. If there was a trust department in that bank it wouldn’t have been allowed to invest the Klampetts’ money in much more than municipal bonds (and possibly CDs or commercial paper, but I don’t remember if those were in existence at the fictional time of the story).

Sorry to go so far off-topic, but I’m one of those people who looks at how accurately things are portrayed in TV shows and movies, and it bugs me when there are noticeable errors.


#19

Ah, yes, I see what you’re saying now!


#20

A tip: don’t watch Squidbillies, at any cost. Your fucking head will explode.