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Bankers, community advocates protest tough down payment requirements

Proposed rules sparked by the financial industry meltdown of 2008 could have the effect of clamping down credit so hard that lower-income buyers and many others would be shut out of the mortgage market, critics say.

The critics, including an unlikely coalition of mortgage lenders, consumer advocates, housing industry officials and lawmakers, say regulators have gone too far in their effort to prevent a repeat of the reckless and fraudulent lending that brought the nation's economy to its knees.

Opponents argue that the new rules, proposed by a bevy of federal regulators, could have the unintended consequence of restricting the American dream of homeownership to the wealthy, leaving behind many creditworthy buyers and shrinking the pool of home buyers just as the housing market is struggling to regain its footing.

"If this rule goes through as it stands, the demographic of borrowers who get (favorable rates) will be white and wealthy," said David Stevens, chief executive officer of the Mortgage Bankers Association and former commissioner of the Federal Housing Administration. "African-American, Latino and first-time home buyers will be charged higher prices."

http://www.msnbc.msn.com/id/43316132/ns ... e_economy/

In other words, the new rules will limit home purchases to persons who have shown the ability to maintain a job, save money and can actually afford the payments over an average 30 yr term....got it...

Appaholic wrote:In other words, the new rules will limit home purchases to persons who have shown the ability to maintain a job, save money and can actually afford the payments over an average 30 yr term....got it...

Why, we can't have that- thats not fair. Whether or not they can document a steady history of a high enough income to pay back the loan isn't what matters. What matters fairness and they have a home. No one should suffer the indignity of working for years or even a decade or 2 while renting to buy a home the old fashioned way.

Home ownership isn't for everyone. If your income/job security makes you wonder if a 30 year commitment is a bad idea, it probably is.

Appaholic wrote:In other words, the new rules will limit home purchases to persons who have shown the ability to maintain a job, save money and can actually afford the payments over an average 30 yr term....got it...

This is entirely unfair to hardworking people with undocumented income, like drug dealers, whores, and illegal immigrants.

What a bunch of malarkey!

The former secretary is exactly right in this case.

Down payment is the greatest barrier to homeownership and has little effect on loan performance. Credit score is the greatest predictor of loan performance.

once people get a taste of free housing it's hard to get them to PAY for it.

Home-ownership, like healthcare, is a HUMAN right and should be available to all persons...

Appaholic wrote:Bankers, community advocates protest tough down payment requirements

Proposed rules sparked by the financial industry meltdown of 2008 could have the effect of clamping down credit so hard that lower-income buyers and many others would be shut out of the mortgage market, critics say.

The critics, including an unlikely coalition of mortgage lenders, consumer advocates, housing industry officials and lawmakers, say regulators have gone too far in their effort to prevent a repeat of the reckless and fraudulent lending that brought the nation's economy to its knees.

Opponents argue that the new rules, proposed by a bevy of federal regulators, could have the unintended consequence of restricting the American dream of homeownership to the wealthy, leaving behind many creditworthy buyers and shrinking the pool of home buyers just as the housing market is struggling to regain its footing.

"If this rule goes through as it stands, the demographic of borrowers who get (favorable rates) will be white and wealthy," said David Stevens, chief executive officer of the Mortgage Bankers Association and former commissioner of the Federal Housing Administration. "African-American, Latino and first-time home buyers will be charged higher prices."http://www.msnbc.msn.com/id/43316132/ns ... e_economy/

Opie has a new hero in his race war.

No sense worrying about any European-American home buyers...if they can't benefit enough from being white to buy a house, that is their fault.

"Proposal targets potential borrowers whose mortgage payment and other debts would exceed 36 percent of their income. "
I have no problem with this.

blueballs wrote:The former secretary is exactly right in this case.

Down payment is the greatest barrier to homeownership and has little effect on loan performance. Credit score is the greatest predictor of loan performance.

Correct.

I suggest making credit repair easier for those that are truly trying and are making strides. Things happen and mistakes should't haunt you. If someone is bad with money but takes advantage of the opportunity to repair thier credit, they shouldn't have to wait 7-10 years before they are deemed "credit-worthy". It's like losing weight: it takes minutes to consume that 1,500 calorie but it takes hours to work it off.

Ibanez wrote:

blueballs wrote:The former secretary is exactly right in this case.

Down payment is the greatest barrier to homeownership and has little effect on loan performance. Credit score is the greatest predictor of loan performance.

Correct.

I suggest making credit repair easier for those that are truly trying and are making strides. Things happen and mistakes should't haunt you. If someone is bad with money but takes advantage of the opportunity to repair thier credit, they shouldn't have to wait 7-10 years before they are deemed "credit-worthy". It's like losing weight: it takes minutes to consume that 1,500 calorie but it takes hours to work it off.

Some cases yes. But some cases no, like someone who is able to make their mortgage payments walks away because they are simply underwater, strategic default or whatever you call it, screwing those of us who are paying ours, underwater or not, then those people it should have to wait a LONG time before they are ever considered credit worthy again.

bandl wrote:"Proposal targets potential borrowers whose mortgage payment and other debts would exceed 36 percent of their income. "
I have no problem with this.

If you want to own a home:

- stay home a few years with your parents/relatives
- room with friends in a SMALL apartment
- SAVE your money...movies, eating out, cable TV, etc. all add up quickly
- SACRIFICE
- buy a home you can afford...+36% is whacked

Oops! What was I thinking? I'm such a mean person...I'm sorry, everyone should be able to buy a huge home. It's the American dream.

Ibanez wrote:

blueballs wrote:The former secretary is exactly right in this case.

Down payment is the greatest barrier to homeownership and has little effect on loan performance. Credit score is the greatest predictor of loan performance.

Correct.

I suggest making credit repair easier for those that are truly trying and are making strides. Things happen and mistakes should't haunt you. If someone is bad with money but takes advantage of the opportunity to repair thier credit, they shouldn't have to wait 7-10 years before they are deemed "credit-worthy". It's like losing weight: it takes minutes to consume that 1,500 calorie but it takes hours to work it off.

Spending patterns are usually habitual. Think of money as gold...handle it well and you'll be OK. Screw up and throw it away and you deserve a "time out".

People want to spend a bunch of money on public education and yet there are few real world classes about how to handle money. There are even fewer classes on being responsible for your actions.

Wouldn't want to hurt the little kid's feewings.

bandl wrote:"Proposal targets potential borrowers whose mortgage payment and other debts would exceed 36 percent of their income. "
I have no problem with this.

That would kill the housing market just as fast as raising the down payment requirements. We see very few applications that have DTI ratios under 36%, and most of them are in the mid 40's. Again, credit score is the greatest indicator of loan performance- not DTI, not LTV, not even occupancy.

One other thing... the data the primary dealers rely on indicates values are starting to stabilize. With that stabilization will come more relaxed underwriting guidelines, nothing like what we saw during the bubble but more common sense and reasonable than what is currently in effect (did I use the word properly ).

Appaholic wrote:Home-ownership, like healthcare, is a HUMAN right and should be available to all persons...

No problem. I doubt these guys took out mortgages:

93henfan wrote:

Appaholic wrote:Home-ownership, like healthcare, is a HUMAN right and should be available to all persons...

No problem. I doubt these guys took out mortgages:

WAY too many white men doing manual labor in that picture.....where are the darkies?

Appaholic wrote:In other words, the new rules will limit home purchases to persons who have shown the ability to maintain a job, save money and can actually afford the payments over an average 30 yr term....got it...

AMEN, bruh.

There were a lot of reasons for the recent bubble bursting, but the folks who say that "fair lending practices" and the demagoguery that led to them were not in part responsible are off the road in the ditch somewhere.

The minute you start requiring people to actually be able to pay back what they borrow you have to deal with these cockroaches.

Hey, if you want to have the Lexus and the 72" flatscreen, then you need to go live in public housing.

If you want to actually own your house then you might want to consider giving some of those other things up.

Oh, and get a job that doesn't involve standing at the corner ol Line and Nassau.

Appaholic wrote:Home-ownership, like healthcare, is a HUMAN right and should be available to all persons...

No it is not, moron.

All Americans have the right to purchase a home or healthcare. However, a two-pack a day smoker with lung cancer should not have his medical costs supplemented by non-smoking individuals' insurance premiums AND folks that do not meet reasonable lending requirements should not have their home purchase subsidized by tax dollars in the name of societal fairness.

The housing bubble began with the Community Reinvestment Act (Carter era) in a misguided government attempt to stop lenders' redlining practices in certain neighborhoods. This evolved into government-sponsored loose lending coercion with the backup of Fannie/Freddie, and home loans with vastly reduced requirements and minimal documentation. And now we are all paying the price for this idiotic social engineering policy.

And idiot here wants to go right back to this type of home ownership.

Rent a fucking house until you qualify to buy one.

JayBilasBitesPillows wrote:

Appaholic wrote:Home-ownership, like healthcare, is a HUMAN right and should be available to all persons...

No it is not, moron.

All Americans have the right to purchase a home or healthcare. However, a two-pack a day smoker with lung cancer should not have his medical costs supplemented by non-smoking individuals' insurance premiums AND folks that do not meet reasonable lending requirements should not have their home purchase subsidized by tax dollars in the name of societal fairness.

The housing bubble began with the Community Reinvestment Act (Carter era) in a misguided government attempt to stop lenders' redlining practices in certain neighborhoods. This evolved into government-sponsored loose lending coercion with the backup of Fannie/Freddie, and home loans with vastly reduced requirements and minimal documentation. And now we are all paying the price for this idiotic social engineering policy.

And idiot here wants to go right back to this type of home ownership.

Rent a fucking house until you qualify to buy one.

Adjust your sarcasm detector, Biter.

Every time I see your posts, I strangely have a craving for soy milk. Weird.

Yup, slipped right through the sarcasm filter. Been pretty wound up with politics lately......

I do agree with the sentiment of your post, FWIW.

blueballs wrote:

bandl wrote:"Proposal targets potential borrowers whose mortgage payment and other debts would exceed 36 percent of their income. "
I have no problem with this.

That would kill the housing market just as fast as raising the down payment requirements. We see very few applications that have DTI ratios under 36%, and most of them are in the mid 40's. Again, credit score is the greatest indicator of loan performance- not DTI, not LTV, not even occupancy.

One other thing... the data the primary dealers rely on indicates values are starting to stabilize. With that stabilization will come more relaxed underwriting guidelines, nothing like what we saw during the bubble but more common sense and reasonable than what is currently in effect (did I use the word properly ).

I thought you were a free market guy?

If the housing market gets killed, so what? Eventually it will level off without government regulations and those clowns who made bad loans will go out of business. No need to bail anyone out...people or banks. That only hurts those who did the right thing.

Every place on the map doesn't need a house...and every town doesn't need to have 10 million people.

My wife & I have great credit & both have good stable jobs, but we have no desire to buy a house. Who the fuck wants to spend their weekends working on home improvements, mowing the lawn or fixing shit when there is a whole world to explore.

Being able to eat is a human right but Wal-Mart won't give you a cart full of groceries unless you have the money to pay for it & that is the way it should be.