Less than $2.3k to go!!
We can do this!!
Posted on 08/30/2013 5:04:45 PM PDT by jazusamo
Housing: Under pressure from civil-rights activists, federal bank regulators have killed tougher mortgage rules requiring minimum down payments and credit scores for loans bundled into securities. Here we go again.
The Fed, FDIC, SEC and three other agencies regulating Wall Street have adopted the same weak underwriting standards the Consumer Financial Protection Bureau set earlier this year for loans.
The Dodd-Frank Act was supposed to require banks and other issuers of mortgage-backed securities to retain 5% of the credit risk of the bonds on their books to avoid the moral hazard that led to the financial crisis, when lenders quickly resold subprime loans to Fannie Mae, Freddie Mac and Wall Street to offload risk. Only high-quality mortgages were supposed to be exempt.
But a week after the president met with regulators at the White House, when he reportedly expressed fears lenders might not want to lend to low-income borrowers, they proposed a broad exemption to the rule covering 98% of all mortgages.
Proponents of tighter underwriting had sought a 20% down payment rule. Now, there is no requirement.
Regulators also punted on proposed credit score metrics — even though the agencies' own studies show credit history and down payments "are significant factors in determining the probability of mortgage default."
Instead, lenders can look to "nontraditional" credit references — rental payment history or utility payments — a practice widely blamed for waves of mortgage defaults in states with lots of immigrants.
Qualifying mortgages, moreover, can count income received from child support and even "government assistance programs" against household debt to meet the new 43% debt-to-income threshold.
The ratio is the only hard metric in the mortgage rules. Yet it was loosened from an original 36% ratio, and it's still not as useful as credit scores in predicting defaults...
(Excerpt) Read more at news.investors.com ...
We are doomed as a country, I am convinced of it after reading this.
Rural property is going to rise in price - again.
If we give Communism just one more chance we CAN make it work THIS time.
Why are you posting articles from 2006?
Wait..this is from today?????
sigh
Sadly you may be right.
Not only can this administration not learn from history, they can’t learn from a disaster that happened partly in their own administration.
It seems Obama and his lapdogs are more interested in minorities and low income people owning homes that cannot afford them than the survival of the country.
Hot doggies! My 15 acres and house are paid for. Bring it on.
“If we give Communism just one more chance we CAN make it work THIS time.”
It seems they think so. Oops...Sorry they can’t think.
The ones with a gas cans are not trying to put the fire out.
This administration, and the string pullers, know exactly what they’re doing.
What they always fail to recognize the low credit and underwriting standards leads to higher demand and higher prices, especially on entry level housing.
With higher standards there will be lower home ownership, but less financial risk and lower overall housing prices which effect rent also.
Immigrants hosed the govt and the banks in the last bubble, because they borrowed and ran...sold the houses at inflated prices to Uncle Sugar.
Agreed, and not because of a mistake.
When folks see their suburban McMansions at threat, they’ll see the wisdom of further properties look for ex-urban and rural climes.
My $0.02.
They were the banks that simply got out of the mortgage lending business totally, and went into commercial business banking. The bubble and collapse came and went with nary a ripple for them.
You are perfectly correct of course. Those 100 million unfortunate souls murdered by Communist governments in the 20th Century were just road bumps on the way to a worker's paradise (paraphrasing our beloved President).
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