Posted on 05/12/2010 1:24:20 PM PDT by Slyscribe
When the bank has FDIC insured deposits you have to though.
Democrats say 5% is too much. They want to give the houses away like the situation they blamed Bush for. I remember 20%.
Number two is the reason that number one happens.
This central planning crap has got to stop.
Our rat masters think more Central Planning is the solution to the failures of Central Planning.
They are entering their fourth decade now of sitting around in University classrooms being told that “the future will be Centrally Planned, and WE will be the ones to do the planning”.
Requiring a 5% is a regulation heavy approach. An alternative would be in how the bank reports such loans. For example. If we define a “standard” mortgage as a fixed rate, fixed term, minimum 5% equity at time of sale, and as long as the consumer remains current, then the bank can account for that loan on it’s books at contract value.
Any loan that violates those requirements, becomes “non-standard” mortgage and the make is then required to report the mark to market value of the asset.
Further, the FDIC can then create different insurance brackets and payment rates for banks that take on higher percentages of non-standard loans. These rates could be lowered by maintaining a higher capital reserve at the bank.
We don't need a law for everything. There are somethings called consequences, if you want to take a risk then congratulations, but don't come crying to me or the government when they come back and bite you in the ass.
>>Sorry, the government (local, state and federal) is already involved up to their eyeballs.<<
I definitely agree with that statement. The problem is that two wrongs don’t make a right.
However, I have a “John Galt” attitude about this. I say what I think “should” happen, and know that is not the way the country is going. I just keep preparing my personal “Galt’s Plateau” in Kentucky to try to make the best of it when it comes down.
Honestly, I hope it doesn’t, and if it doesn’t, my “Galt’s Plateau” will be an even BETTER place.
But this stuff is all academic to me now. I definitely see these discussions as talking about how to keep the water rushing in on the Titanic as we look for a seat on one of the lifeboats.
so giving houses to those who cannot afford it and have not shown they save did not work so instead of learning from this they still want to do it
and the far left wonder why they are regarded as thick and dumb.
they might want to look up what insanity is the idiots
Thank you ... I agree 100% ... There is no way I would put 20% down on a property in this market. With all the govt is doing these days that 20% could be vaporized in no time.
The way I look at it ... IM the one taking the risk buying the property. The bank can verify my income and spending habits all it wants. I can afford the property, I have a history of paying the bills, but there is no way Im giving up $50k in cash to buy a house.
Galt’s Gulch?
http://www.LivingInThePhilippines.com
My wife and I bought a house earlier this year. The Realtor suggested a small Bank that he had a friend at. We have a fair amount of money in the bank, but I am self-employeed. I was expecting the third degree and all kinds of proof requirements. I also expected to have to deal with a larger institution. But the Realtor kept bugging me to go to his friend so I did.
This guy basically wanted three years of tax returns and current bank statements - that's it. I walked away telling my wife, “get ready for the phone calls.” Sure enough, four days later they called - “you have the mortgage, when do you want to close?” I was astounded that they asked for so little information. I was even more astounded with the down-payment. We were planning on 20% - the guy at the bank said, “I wouldn't, put down 5% if you want to, but keep the rest in the bank.” He actually suggested we put down 3.5% but we left it at 5.
Now the punchline: two months later we get a letter saying our mortgage has been sold - to Bank of America! I'm fairly certain that if I had walked directly into BOA, much more proof would have been required. But I guess we were sold with a “package” of loans.
I have to admit I am still bewildered at how the mortgage business currently works!
DO NOT BAIL THEM OUT IF THEY FAIL.
YOU ARE EXACTLY RIGHT.
Amen.
It can take 10 years to save up that much money, and some Freepers and other purists insist on 20 percent down or nothing.
No way am I going to see my 10 years of savings evaporate just do I can say I have 20 percent down.
It’s absurd. I’ll put down a minor down payment and pay $50 a month in PMI.
Help to read the story, easy credit rules the Democrats in DC would be a more accurate statement
Ok, foolish ones...let’s hear about how the banks made bad loans because of greed...
You can thank your democrat congressmen for forcing banks to make bad loans, which increased demand for homes causing the real estate bubble which has blown up in our faces...
It was BAD REGULATORY MISMANAGEMENT that caused the current economic downturn...don’t believe the marxist lies!
“Now the punchline: two months later we get a letter saying our mortgage has been sold - to Bank of America! I’m fairly certain that if I had walked directly into BOA, much more proof would have been required. But I guess we were sold with a “package” of loans.”
That is one reason the arguments against minimum down payments are wrong here. The lenders don’t care about solvency or risk, because they do not bear the risk. They sell the product to someone else, usually to be securitized into “toxic paper.”
The other reasons are,
2. We are on the hook via FDIC,
3. George W. Bush relented and announced to the world that Fannie Mae and Freddie Mac are “government backed.” That’s us.
I was reading the comments below the article...WOW! the left is losing battle after battle and they are awaking a new sense of pride in being American and the American way of life. Kind of like that a**wipe Jimmy Carter did in the 70’s with his miserable reign of abuse of America.
Oops, wrong thread. I have a bad habit of having several threads open at once, sorry...
Yep.
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