Posted on 10/14/2013 3:44:16 PM PDT by Libloather
How do you feel about VA’s no-down payment home loan program?
And brain surgeons are trained and organized to operate on brains. So what? These loans have nothing to do with agriculture and should not be part of the USDA. It’s nonsense like this and the associated rationalizations that lead the trillions in debt.
“And USDA is trained and organized to work with local officials in communities that don’t have battalions of professional planners and grantwriters on staff.”
Any federal program that allows people to purchase homes with no money down is a bubble-in-the-waiting. This is not speculation. Do you not remember what happened 5 years ago? The economy got blown up by this sort of behavior.
The alphabet agencies do all kinds of things that they were not designed to do. And they exist outside of Constitutional design.
You pay the mortgage,you keep the house,you don't pay the mortgage,you lose the house.
Yeah, that's what lead to the Great Recession. A whole bunch of people bought houses with little or no money down in the expectation that their houses would increase in value and when the housing market tanked, they lost their jobs and then their houses.
Yea,well,that’s life,stuff happens.
Life is learning from mistakes and not repeating them - at least it is when you don't have the federal gov't propping you up.
USDA mortgages are geographic specific within defined areas that are supposed to be within agricultural communities.
Where ever you start to see a plowed field on the outskirts of a suburban area that’s where USDA begins.
Seen many a house in a subdivision get USDA financing and not one person living there worked in anything agriculture related. All were commuters within 20-30 minutes of their jobs.
These are loans to encourage the purchase of homes in rural areas. I agree that the federal government should not be involved in this, and I’m just trying to explain the rationale: the average urban/suburban lender does not want to place loans on farms or on places that need restoration.
They don’t understand the economics of farming at all.
By the way, the shutdown is halting large segments of the housing industry now, since the IRS provides verification of financial information borrowers submit when they want to obtain a mortgage for a house purchase. The housing market was recovering and then suddenly came to a crashing halt last week. I should know—I am trying to sell. No one can get a loan now.
I always learn something on FR;)
Lots of farmers lost their lands to crooked bankers. A bank would loan a farmer money for the crop. If the harvest was bad the bank would refinance it until next year. When the farmer couldn’t pay it all the next year the bank would foreclose.
Sears and Roebuck forced a lot of small businesses to sell by giving them a huge order for their products. When the business couldn’t deliver they’d get a loan and expand their facilities. The next year Sears wouldn’t give them an order but would offer to buy them out.
I did.
However, I do not know WHY they are.
It makes no sense.
Especially for subdivisions. What is rural or agricultural about housing subdivisions?
Except the taxpayer is backstopping the loss in the case of default if it’s a government issued or backed loan program.
The mortgage holder loses nothing. They get to live in a house paying probably less than it would cost to rent a comparable house and if they default, they lose no personal money. They have no money invested in it.
Except USDA loans are not just for farms now.
They are for brand new houses in subdivisions in rural areas. They basically encourage the loss of farmland and rural areas
As a rural person, I can say the only ‘benefit’ I’ve seen from USDA mortgages is that it makes developers rich by busting up farms. That’s another agency that has lost it’s way.
I know. I was explaining the original premise. Not that the government should be involved in any way.
For those that care,they lose self respect.
Just 'splainin' where it came from historically. If you want to get the feds entirely out of these lines of business, fine -- but start with HUD, SBA, many other Commerce agencies, HHS, etc. USDA has been involved historically because Farmers Home stepped up to fill gaps in rural America that weren't being adequately addressed by other agencies.
Just for the record, it has been a LONG time since USDA was mostly about agriculture. The name should probably be changed. Over 80% of its budget is nutrition (SNAP is the biggie), which you probably knew. It also does food inspections, ag export inspections, animal plant and health, a lot of applied research, rural development, conservation, etc. And the biggest chunk of employment in USDA is the Forest Service.
When I say that USDA is trained and organized to work with rural communities, I mean simply that USDA has a highly decentralized field staff that works in closer partnership and provides more TLC than most federal agencies. Farmers Home and the Extension Service used to have offices in each county across farm country. Those have been heavily consolidated, but RD, FSA, and NRCS still maintain substantial field networks; the offices now number in the hundreds rather than the 2-3,000 county offices of a couple of generations ago. That translates into ease of access, a high degree of personal contact, and high levels of service. At least, that's the theory. I think that if you compare the customer interface of the rural housing service with HUD, you will find the difference is night and day.
I'm not averse to getting the feds out of the housing business entirely, but as long as the feds are running programs in this area, I'd rather have USDA running the rural portfolio. Rural is different. USDA knows that. For other agencies, rural is usually an afterthought.
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