Posted on 09/14/2010 8:57:18 AM PDT by rightistight
The financial collapse occurred because housing lenders wrote paper to people who couldn’t afford the houses they bought, often getting a no-down arrangement, while lenders sold the paper to Fannie Mae and Freddie Mac, which securitized them and spread the bubble throughout the financial markets in order to provide even more capital for even more bad loans. After nearly watching the Western world’s financial structure melt down, one would hope that we would have learned a lesson from the catastrophe. Apparently not, as CNBC’s Diana Olick reports (via Instapundit):
"At around the same time this program went into effect, the New York Times did a piece on a small program Fannie Mae is implementing through state housing finance agencies, which have been crippled by the recession. It’s called Affordable Advantage, and it allows first-time home buyers in four states (Massachusetts, Minnesota, Idaho and Wisconsin) to get essentially no-money-down loans that are then sold to Fannie Mae. It requires $1000.00 down, but the couple profiled in the piece received a grant, and ended up paying just 67 cents for a $115,000 home.
The Fannie Mae program requires a minimum credit score of 680 (720 in Massachusetts) and the buyer must live in the home. All loans are 30-year fixed. The arguments for the program are persuasive: It wasn’t the no-money-down loans themselves that fueled the housing crash, it was the poor underwriting. These loans are very strictly underwritten. Adjustable rate loans were the primary drivers of default, while these loans are fixed."
No money down! Government grants! In other words, we are once again underwriting the process of putting people into homes they can’t afford at the moment, and ensuring that they have no really good reason to stick with it if times get tough.
(Excerpt) Read more at hotair.com ...
Keep demonizing the lenders, rather than Barney Frank, Chris Dodd, Jimmy Carter and that crew. That’ll make people want to get into the game and bring the market back!!
Actually, the original problem with some people not being able to afford their homes was, dollarwise, not a great big problem but a much smaller one that could have been solved to a large extent by the morgage companies.
But the MSM and the financial news blew the problem up from a financial panic into a recession. The intent was to destroy George Bush and it got out of hand. Just as they have championed and been instrumental in creating bubbles over the last ten years or so.
The original problem was not big enough to create a 34 month recession, but was upgraded by their cheerleading.
You will see more and more lenders offering no money down contracts as many people don’t have much discretionary income. As the discretionary income situation is repaired, the loan requirements for down payments will increase.
The loan companies need to stay in business and first time homebuyers, 60% of the market, are needed to keep from going under.
There is no conspiracy here, just market forces.
But, but, but it’s okay now. It’s called wealth redistribution and reparations... hope & change and all that.
Wow, I think I just fainted.
So how many PMI companies have gone belly up?
I have a nice house.
I got a jumbo loan.
Because I own businesses I get around 30-50 routine credit inquiries annually.
That costs me 100 or so score points any given year.
hence a score in the high 600s is good for me
cutoff score for premium home loans on the New York boards is 650-680
therefore I ended up paying down 60% on my home
even though I pay 6 figures in commercial mortgages monthly and am never late on anything but local taxes which are routinely under appeal and which isn’t reported until lien which I avoid of course
life ain’t fair but this one always pisses me off
I had better credit as a college buck with one AE card and a car note
Like small biz loans so companies can increase capacity for the same trickle of business they have now?
And I take little comfort in the credit rating guidelines. Many of us were in the low 8/high 7 range before we were sucked under when they sank the ship.
Nothing to do with Bankers and Mortgage Loan Companies blackballing appraisers who refused to keep spinning up prices.. Shared those lists between firm (RICO Violation),
No it's the people.. What a pathetic and transparent lie..
even as the FBI has arrested 100s of Mortgage and Banksters they try to deflect the blame onto the people they swindled..
Three Generations of Labor by American stolen in a little more than 7 years.. by Banksters and other Financiers..
Their Motto:
" It's our money ...we stole it fair and square"
W
Many of us is the operative phrase. According to Experian 25% of the population has had it’s credit rating decline.
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