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 ...
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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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.
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