Posted on 12/10/2014 7:21:18 AM PST by TurboZamboni
WASHINGTON (AP) — Some Americans will soon be able to buy a home with a down payment as low as 3 percent, compared with the current minimum of 5 percent, the mortgage giants Fannie Mae and Freddie Mac say.
The new lending guidelines announced by the companies Monday are designed to help more low-income and first-time buyers afford homes. Millions of Americans lost their savings or no longer had the income needed to set aside money for a home in the aftermath of the 2008 financial crisis and the Great Recession. That has held down the sales of houses and condominiums and slowed the economic recovery.
The guidelines are designed to prevent the kind of reckless lending that fueled a housing bubble and eventually triggered the recession. Borrowers must have enough income to repay loans on a monthly basis for homes that would be their main residence. This guideline would be intended to limit financial speculation.
(Excerpt) Read more at twincities.com ...
Those who don’t learn from the past are condemned to repeat it.
This is great thinking.....they create the conditions causing Americans to lose their savings & their homes & then lower interest rates to convince them to spend money we still don’t have,in addition to creating interest rates on existing savings accounts that are so low they are virtually worthless. Barack’s plan seems to be moving forward nicely.
I think we already tried this...
This will not end well.
I agree! My first job out of college was working with a big bank that gave ridiculous loans out to the worst credit offenders. Folks were getting home loans in the 15-20% range.
3% down on a home is nothing and this terrible problem will come back again.
It’ll end with Hussein taking over the banks inthe nat’l interest. You know the rest.
Let’s double down on dumb!
Wash. Rinse. Repeat.
And it worked so well the first time....
Cycles - if you can predict them, you can get rich off of them.
Insanity - Doing the same thing over and over again and expecting a different result.
They can already do that with FHA and USDA backed loans (yes the USDA has a home loan program)
3% down.... 30 year note. People are just dumb. I’m a Realtor. I see it everyday. People call you and want to buy a house, and they have about $150.00 saved at the moment. (until their cable bill comes in) But mom and dad is going to gift them the 3% they need to put down... and the government will back the 30 year loan. I mean, I have to sell to people like that or I’ll lose my Real Estate License... but... I sure like to do business with people who have money and are buying something they can afford. People I know are going into a deal that will end up successful.
The plan is working .... they have to save the FIRE industry or they will get zip in the next election cycle.
Realtors and home builders are very powerful lobby groups in DC
Sad to say, such people are at higher risk of default at some point. I would be concerned these policies will simply set us up for another mortgage crisis down the road.
Of course financial situation is primary reason my leads drop out
We don’t show until financing clear
Best wishes
Just thinking the same thing.
I'm not sure I'd want to get into the rental business given the vast pool of less than desirable renters, but I have a friend who does pretty well with it.
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