Posted on 01/26/2017 10:11:06 AM PST by VitacoreVision
Edited on 01/26/2017 10:22:13 AM PST by Admin Moderator. [history]
Among the many new directives and executive orders already issued by the Trump administration is a little-noticed order to halt a scheduled cut in mortgage insurance fees levied by the FHA.
Earlier in January, the Obama administration announced it would cut the FHA's insurance premium by a quarter of a percentage point to 0.60 percent, effective on Jan. 27.
(Excerpt) Read more at mises.org ...
Back in the day, you had to put 20% down to buy a house. The idea was that you had “skin in the game” and were very unlikely to walk away.
But that all changed and it is what gave us the housing bubble. It looks like DJT is trying to reign in the housing market back to “sane” levels.
BTW, this will remove a lot of potential home buyers from the market. I expect prices to drop significantly. There will be less flipping, probably, as well.
When more people have to come up with an actual down payment, there will not only be less buyers (deflating prices), but sellers will lower prices to get people into their homes.
Coupled with the last interest rate increase, I think the second bubble is about to burst
A subsidy is adrenaline injected into a bad idea so it will live another short while.
If anyone understand the real estate market from inside and out - it’s DJT.
He’s made millions in real estate deals. And lost millions too.
I trust his judgment.
Not sure you’re right. Where I live, supply is low, demand high. All I want is small government. Backing out of the maze of regulations and taxation will upend the economy, for awhile.
Where I live, supply is low, demand high.
Leftists will point out two problems:
Problem #1 — Trump is a real estate guy and he will help all of his friends in the real estate business! Bad Trump! Bad! Bad!
Problem #2 — Trump just cut a subsidy, which means he basically raised taxes, which means the real estate industry is going to take a hit! Bad Trump! Bad! Bad!
It revealed financial schemes by low-income housing groups, Hispanic lawmakers on Capitol Hill, including a congressional Hispanic housing initiative. Subprime mortgage lenders and brokers, colluded together in fraudulent schemes to increase homeownership among Latinos using falsified applications, and other tricks of the trade. (hat tip Federal Financial Institutions Examination Council)
The massive mortgage fraud ended in disaster for which no one has been held responsible. Taxpayers got saddled with billions of dollars in bailout bills.
These subprime activities were not simply the mortgage market at work. They were fueled by avarice, greed, stupidity--all enabled by Congressmen and other groups which leave a trail at the door of then-Cong Joe Baca (D-Cali).
Between 2000 and 2009, Hispanic populations increased; but Hispanic home ownership grew even faster, increasing by 47%, to 6.1 million from 4.1 million, according to the US Census Bureau. Over that same period, homeownership nationally grew by an enemic 8%.
In 2005 alone, mortgages to Hispanics jumped by 29%; Latinos with multiple fraudulent identities in low-paying jobs obtained costly non-prime mortgages---soaring to a shocking 169%, (Research provided by Wall Street Journal)
The subprime mortgage bank fraud network was spearheaded by then-Cong Joe Baca (D-Calif 43rd), in his powerful position as chairman of the Congressional Hispanic Caucus. Baca's district ranks No.5 among all US Congressional districts in percentage of home loans tailored to sub-prime borrowers.
Baca used his the legislative power of his office and his leadership position in the Congressional Hispanic Caucus to calculatedly launch a housing initiative called "HOGAR"-- Spanish for home. conspiract and colluison the Congressuial Hispanic caucuss has been quiet about his role in financing, and, earmarking the blood-thirsty America-hating La Raza. race-based "La Raza" was given tax dollars and Congressionsl earmarks to finance its so-valled mortgage activities.
La Raza's "strategic partnerships” with Wachovia and Bank of America forced banks into giving mortgages to unqualified borrowers that undermined accepted requirements and documentation standards. This triggered billion dollars bailouts and ended up decimating the US economy.
La Raza aided and abetted risky federal and private-home loans to latinos over the last decade forcing the lending industry’ policy of “don’t ask, don’t tell.”
In addition to millions of federal tax dollars, La Raza also collected a $1 million Democratic earmark that funded “community-development” projects. Analysts report that much of it went to (cough) "mortgage counseling."
CUE LAUGH MACHINE.
GENESIS OF THE SUB-PRIME BILKING OF TAXPAYERS
Clinton appointee, Fannie Mae CEO Franklin Raines, Pens a Letter to Shareholders
Excerpted from Raines 2003 Fannie Mae Annual Report
Excerpt ...Ten years ago the typical conforming mortgage required a down payment of 10-20%, and low-down payment mortgages were considered too risky. But then we helped to standardize the 3-5% down payment loan, brought it to global capital markets, and made it available to lenders and communities nationwide. Now low-down payment loans are commonplace. And we just adopted a new variance in our underwriting standards that will make the $500 down payment loan widely available as well...
In 1994, we pledged to provide $1 trillion in capital to ten million underserved families by the end of 2000. Thanks to our housing and industry partners, we met that goal early.
Then in 2000, we launched our American Dream Commitment, a pledge to provide $2 trillion in capital to 18 million underserved families by the year 2010, including $400 billion targeted specifically for minority families (later raised to $700 billion in response to President Bush’s Minority Homeownership Initiative). After four of the strongest years in housing and mortgage finance history, we’ve already surpassed the top-line goals of this commitment. But our work is far from complete.
So in January 2004, we announced our Expanded American Dream Commitment and pledged significant new resources to tackle America’s toughest housing challenges. Our new commitment has three main goals.
First, we will expand access to homeownership for six million first-time home buyers in the next ten years, including 1.8 million minority first-time home buyers.We also will help raise the national minority homeownership rate from 49 percent to 55 percent, with the ultimate goal of closing it entirely.
Second, we will help new and long-term homeowners stay in their homes through a series of initiatives, and commit $15 billion to preserve affordable rental housing and $1.5 billion to support the revitalization of public housing communities.
Third, we will increase the supply of affordable housing and support community development activities in at least 1,000 neighborhoods across the country through our American Communities Fund, and through targeted investments like Low-Income Housing Tax Credits that help finance affordable rental housing.
It is because of initiatives like our Trillion Dollar Commitment and our American Dream Commitment that we have exceeded our HUD affordable housing goals for ten consecutive years. (End Raines excerpt.) (NOTE Raines is a Clinton appointee)
NOTE: Raines was fired for being a crook-—Raines cooked theF/M books to get bonuses. But he walked away a multi-millionaire-—extorting millions from taxpayers for pensions, bonuses, lifetime healthcare, donations to his fave charites....etc, etc, and so on, and so forth, ad infinitum ad nauseaum.
These mostly would be buyers with credit scores well below 600
Call them future foreclosees
And call the homes they didn’t buy “Not taxpayer insured and bank owned detritus”
I thought they hated “corporate welfare”
Excellent turn of the phrase, The Bard would be proud.
When I lived in Seattle, during the last housing boom, I knew a guy who had such a lousy credit score that he was declined at an apartment complex.
So he had to buy a house instead.
Dead serious.
Heady times. :-D
He’s been in the real estate business for close to four decades. I’d trust him to know what he’s doing.
You’re good!
and obama was blowing the horn to “increasing opportunities for lower income people to have houses” what’s what got us in trouble. Possible Clinton and the democrats would have continued along that course.
I just lost a system administrator from my San Diego office to another employer in VA. The employee could not cobble up enough to qualify to buy even a small condo in San Diego with both spouses working. He could afford a place in VA and had a good enough offer to jump ship. I spent two years training the guy in Linux and VMware to augment his Windows credentials. Once again, I have two offices in two cities with no sysadmins. People in that pay grade can't afford San Diego and don't want to work in Omaha. After camping in a rented bedroom in San Diego for 5 years to help that project, I'm back home in Idaho. No real desire to repeat the experience.
The only thing that is going to save us from total financial meltdown is austerity - before it’s too late.
Looks like Trump may actually be doing that. However, like Chemo, it’s gonna hurt like hell before it fixes the problem. I don’t know if ANY politician can survive that.
We’ll find out.
Was just thinking the same thing. Liz, you are a FR research maven!
Didn’t know La Raza was involved. Did they use pressure group warfare to get BofA, Wachovia to go along with the home loans? Thought Congress passed a law years ago to force lenders to offer loans to risky borrowers? Forgot the name of it.
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