Posted on 05/12/2010 1:24:20 PM PDT by Slyscribe
Wait until November when we flip that house.
Hey there! ;^)
A down payment is not only “skin in the game”,
but it reflects responsible spending habits,
which correlate to the ability to pay off a loan.
However, if there’s one thing the left despises,
it’s personal responsibility.
except for those programs that led to the melt down, I thought 20% was the expected down payment. Apparently they never went away.
Or FDIC insurance.
5% down is 20 to 1 leverage. Meaning if they lose 5% the bank is bankrupt and bailed out by us.
To be consistent, they should also not get involved in whether the banks lend to minorities with bad credit, and not bail out banks which fail due to poor lending policies.
I am in the loan process now, and income verification, money down, and even to the point of requiring 6mos P/I in the bank are the minimum requirements placed on me. That is on top of the down money, closing costs and insurance. So I am not sure which banks are just giving away money, but BofA isn’t.
real estte= real estate
I also “do real estate” -
I’ve heard that banks are unwilling to foreclose because they’d rather have the $200,000 “asset” on their books than a reappraised or short-saled $100,000 asset.
>>Sure, in a world where there’s no Fannie or Freddy.<<
I understand the sentiment. However, the correct action is not to interject government into it. The correct action is to pull the government out. The whole thing has become a Rube Goldberg machine and when one goofy part breaks, they want to add another goofy part to fix it.
That’s what got us here in the first place.
That would be a fine sentiment, if there weren’t the incredible moral hazard that the government will come in after the person lending you the money goes belly-up from all the loans issued to subpar borrowers. So long as the instutition ITSELF bears the credit risk, then ok, no limits on what kind of contract you can agree to. But if the government (i.e., my pocketbook) is going to implicitly guarantee your loan, then I (as actual lender of last resort) would insist on better terms, such as much higher down payment participation.
“The banks and the free market will figure out the rest by killing off banks that make bad decisions and rewarding banks that make good ones. This central planning crap has got to stop.”
Completely agree with you!!!
Sorry, the government (local, state and federal) is already involved up to their eyeballs. Most closing documents are government forms nowadays. Google "RESPA"
What is happening is that asking for even a minimal down payment or proof of the borrowers ability to pay is racist.
We can't have THAT happening now can we?..................Oh, the horrors! ............
I honestly would rather pay $30 bucks a month for PMI than put 20 percent down.
That is a LOT of money, and frankly, it does a lot more good IN THE BANK earning interest than being put down on a home.
That said, I do think people should have to pay something down.
It isn’t the government’s business to require it though.
The dems were right on this one. I do NOT want the government getting involved in how me and the person lending me money come up with a mutually agreeable down payment.
I agree with all of the sentiment here about keeping government out of “private business,” but when you have the Federal Deposit Insurance Corp. insuring deposits in banks you can be sure that the Federal government has every reason to ensure that these banks are financially stable.
Our rat masters think more Central Planning is the solution to the failures of Central Planning.
RockinRight, I know people who have been gifted FHA 3 percent down payment and have had no problems paying it back. Never a late payment on the mortgage etc. The only issue was monthly cash flow didn’t allow for a huge mess of savings to have their own down payment of thousands of dollars. But, they have had no problems.
I don’t see why a gift is a problem IF people can show they have a history of on-time payments for other bills.
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