Posted on 10/25/2009 10:51:43 AM PDT by newbie2008
Denise Tejada bought a house last month at the age of 20, thanks in large part to a loan guaranteed by the Federal Housing Authority. This story offers a dramatic demonstration that, despite the housing bubble causing the worst economic downturn in generations, the ideology of home ownership is alive and well in the United States and still being supported by the government. Without question, Tejada's loan is toxic--to her and to the taxpayers who are backing the loan. Her house cost $155,000. Tejada's loan was apparently made on a micro-down payment of just 3.5%, the minimum down payment to qualify for an FHA loan. On top of this, however, she got an additional government backed loan to make improvements. Her total loans amount to $183,0000. In short, she was immediately underwater on her new house.
(Excerpt) Read more at businessinsider.com ...
And who would do this and why?
Housing bubble 2.0 is well on its way
She’s so guilty I feel like throwing up.
It’s called ‘reparations.’
Well then, the flood insurance she bought from the government ought to make it all right.
Federal funding of ACORN resumes in 6 days —the suspension was TEMPORARY.
I have no problem with micro-down payments, mini-interest rates, etc. Here’s the problem with the lender...
“The monthly payments on her debt amount to $1328. Her income is $2470, leaving her with just $285 a week to live on.”
That should be the only consideration when granting a loan. Can the recipient afford to make the payments?
With the economy tanking like it is the Oakland,Ca. area might just resemble her native Guatemala in short order.
Wish her well but the reality is that she is a financial idiot but not to any degree beyond the morons of the Govt. who created the housing bubble downfall mess in the first place. She is slave to her house as well....welcome to her American dream?
Projectile vomiting guilty. I need to lie down.
All I need is a refi, and I can’t get that unless I am near bankruptcy... meanwhile bums and thieves make out like a presidential intern toking on a Cohiba.
“”And who would do this and why?””
I’m sure it happened so she could claim the $8000 first time homebuyer credit. Reports out this last week found 90,000 ineligible and suspicious claims of tax credits totaling over $600,000,000 under that program. There was even a 4 year old who was approved for that credit.
See FR “Over $600 Million Of Credit For First-Time Home Buyers are Suspicious.”
Everyone who ever approved loan papers like this should go to jail.....EVERYONE! No charges, no trial, just straight to jail. Loan approval is evidence enough. People are fed up with the door being opened like this from DC and those who are told they “are entitled” will jump on the wagon every time.
The link has a video and here’s what you’ll learn from the two (El Salvadoran) kids who speak there:
Their dad “immigrated” from El Salvador and bought the family a home in less than 2 years. Both of the kids recently bought homes here in the US —the location is not disclosed. The girl is 20 years old, and the boy looks about...25 years old.
Their dad advised them not to buy useless things, and instead to buy a home.
Yep. BTW..This loan (FHA) is guaranteed by Uncle Sam. Ginnie Mae bonds are paying 4.5 to 5% right now..not a bad investment.
The essence of liberalism - rewad bad decisions and punish prudent behavior.
And what about the responsibilities of the buyers? You surrender your responsibilities you forfeit your rights.
The other day on KSFO radio in San Francisco, they had conservative author guest, and he related the case of an illegal alien berry picker whose annual income was $16,500 and bought as house priced at $750,000.
This was about one year ago.
So that would make for a person who devoted EVERY dollar of income to paying off the house (without interest) for fifty years.
FIFTY YEARS.
But on the vid she mentions they are from El Salvador... errr...which one is it---not that there is a vast difference mind you but correct facts do matter.
She can if she has six kids from six different daddies all paying child support, and taxpayers paying WIC subsidies, and half of her kids classified with some kind of “disability” like ADD or high functioning autistic or some such BS.
Also, if she gets her unemployed sister qualified as a government daycare provider, her unemployed sister can get a government check for babysitting her kids in her new house. And then her unemployed sister can pay rent to live in her new house.
Then both her and her unemployed sister can get night jobs as strippers and make lots of cash off the books...plus even more cash off the books if they bring some of their favorite customers home once in awhile.
She should have more money than she knows what to do with.
Ginnie Mae? I am going to start using that. LOL
FHA’s DTI ratios are well below that; and part time income can not be counted for income unless there is a solid 2 year history.
Most 20 year olds are not ready for home ownership, with some exceptions. I was hoping this story would show her to be an exception. But it is not; this is a bad loan and shouldn't have been guaranteed by the taxpayers.
But if a private lender wants to take on the risk; more power to them. Just don't send me the bill.
Derrrrrr...need to strip off a few pounds first and ease off the enchiladas con queso!
Did the bank provide the loan on “potential” avenues of income or present income? If the former, the bankers are idiots. If the latter, the bankers are idiots.
How much was a down payment and maybe it was a house that housed 7 berry pickers with a combined income of 110,000 a year, and without more facts, this could be a very good performing loan.
why? They don’t have to guarantee the loan. I’d say they are pretty clever.
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Obama Says A Baby Is A Punishment
Obama: “If they make a mistake, I don’t want them punished with a baby.”
I’m sure there are plenty of fat strippers making lots of money.
Let's see. $283 a week, with a (paid for) used car, should leave enough to get by with the house paid before the $283 a week.
There are people paying all their bills on $400/wk out there.
It will only work if she is frugal, does not spend money on things she doesn't need, and lives a no frills life until she is making better money.
Not everyone has a big screen TV, high bandwidth internet and the latest techno-stuff. Staying a level or two behind the latest stuff is far more affordable.
Hee, hee. I guess it’s a win-win.
You have a true understanding of how to move on up in America if you lack marketable skills. Do you have experience in any of this? :)
Yes, but for you and I it’s a lose-lose.
The monthly payments on her debt amount to $1328. Her income is $2470, leaving her with just $285 a week to live on. She's paying 54% of her income to make the mortgage payments.
I thought the old rule was the mortgage payment couldn't be more than 1/4th of your after expenses income?
If she were a non-hispanic, American-born citizen she would not have “qualified” for this loan. But, since she is hispanic (and probably an illegal since there is no agreement on her country of origin) all she has to do is open her mouth and ask and she is rewarded. This is no longer the United States; we now live in an alternate universe where crime and irresponsibility are rewarded and playing by the rules and being responsible are punished. Liberalism and the left are responsible for this, and I despise both with every fiber of my beng.
Underwriting decisions should be made on rational things and a persons pie in the sky wishes
Doh!
I have a female relative unmarried with kids. One of them is classified as high functioning autistic. I know how the scam works.
I dated a girl once for a brief period that seemed to be unemployed but overflowing with money and nice clothes. It took me about 2 weeks to figure out her scam. I can’t remember the name of the program, but there is a government program that provides day care to underprivileged mothers. She got herself qualified as one of these government daycare providers and received checks from the government. Her official residence was with her grandmother. All her sisters and female cousins had hoards of illegitimate kids. Every day they would dump the kids off at her grandmother’s house(supposedly) and this girl I briefly dated would take care of them.
In reality, the kids never made it to the grandmother’s house and this girl rarely was there herself. She lived at all of her relative’s homes, aunts, cousins, etc, and rotated around every night. THe kids rarely left their own homes. This girl just went from house to house checking on them all day, or taking them on shopping trips. I think the kids looked at her as their mother more than their real mothers.
Her hours she reported as a daycare provider were grossly exaggerated.
I thought she was a college student and I was impressed that she was latina, never married, and no children, excellent english...and also gorgeous. She seemed pretty smart. Boy was I shocked when I figured out the truth.
you raise an interesting point there. I have also observed this kind of housing behavior whereby multiple wage earners contribute to the rent/mortgage. This seems reasonable except you end up watching the standard of living for everyone go down as a result because: A.) the neighbors now have a flop house next door and B.) rental agencies can charge higher rent than a traditional nuclear family can afford soooo, the traditional nuclear family has to look for less of a home to rent or they have to do as the immigrants have done and invite another family into their home which was never designed to house more than one family.
I thought it was 30% but could be wrong.
You work in an ACORN office, right?
;-P
Quite smart of you not to get too involved.
Or she could be a mail order bride for Japan...they pay by the pound.
</SomethingAboutMary>
Agree completely.
Why are Hispanics getting reparations?
FISCAL YEAR 2009 HOUSING COUNSELING GRANTEES 12 DISTRICT OF COLUMBIA
13 Washington NATIONAL COUNCIL OF LA RAZA $1,120,501.00
14 Washington NATIONAL COUNCIL OF LA RAZA $150,000.00
15 Washington NATIONAL COUNCIL OF LA RAZA $1,260,117.00 Local Housing Counseling Agencies; Multi-State Agencies; & State Housing Finance Agencies Total: $ 23,831,728.00 MORE- http://74.125.155.132/search?q=cache:AYlHNjQv3jcJ:portal.hud.gov/portal/page/portal/HUD/press/documents/Housing%2520Counseling%2520Grants-byState.xls+%22National+Council+of+La+Raza+%22+site:portal.hud.gov&cd=1&hl=en&ct=clnk&gl=us
City Seeks Properties for Purchase: Implements Neighborhood Stabilization Program
— Thursday, October 15, 2009
The City of Las Cruces is seeking eligible properties for purchase under the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program (NSP). The program is part of the Housing and Economic Recovery Act of 2008.
Under Title III of the program, the City of Las Cruces received $1.5 million in federal grant funding through the State of New Mexico, to purchase and redevelop foreclosed or abandoned, blighted or vacant properties.
According to Jerry Nachison, Housing Development Coordinator in the Community Development Department of the City of Las Cruces, “The City is initially looking to purchase about ten to twenty properties from owners willing to sell. We’re looking for minimum size - one bedroom, one bath – and up to four bedrooms - single family dwellings, including condos, duplexes and town houses, with at least 150 square feet of outdoor property.” He also states, “The value of the properties sought by the City is between $50 thousand and $100 thousand.”
Once the City acquires the properties, it will transfer them for rehabilitation to non profit organizations such as Tierra Del Sol Housing Corporation, which will use the properties for affordable home ownership.
“As properties are rehabilitated and sold for homeownership, the money generated will return to the City of Las Cruces where it will be used to purchase additional properties. We plan to continue this activity through April 2013,” Nachison said.
http://www.las-cruces.org/news/news_item.asp?NewsID=2177
Corporation Receives Funding to Improve Homes in Colonias
Friday, October 2, 2009
WASHINGTON – U.S. Senator Tom Udall today announced the Tierra Del Sol Housing Corporation will receive a $121,848 grant to repair and rehabilitate the homes of five low income families. FIVE FAMILIES???? In addition, Tierra Del Sol will provide more than $300,000 from other sources to help with repairs.
The funding, from the U.S. Department of Agriculture Rural Housing Preservation Grant program, will help repair leaking roofs, plumbing and crumbling foundations. It will also be used to pay for additional insulation, caulking and energy-saving windows and doors to cut down on monthly energy bills.
“Families in the Colonias all too often do not have access to safe affordable housing. This grant will provide resources for five Anthony families to improve their homes and save money by cutting down on high energy costs,” Udall said.
http://tomudall.senate.gov/record.cfm?id=318597
bump
No argument that the mortgage approval was stupid, stupid, stupid. But I have to question a story that picks apart a loan approval but has to use the word "apparently" over something as basic as the amount of the down payment. Why is the amount of the down payment in question?
Just propping up the overpriced housing the normal consumer wouldn't prop up.
My son bought his forst home in 2008. He found out from his accountant just a month ago that the $7,500 homebuyer credit he was counting on his 2008 return was gone. There was a virtually hidden $75,000 income limit on that program that he or I never knew about.
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