DISQUS

Toby · 1 year ago

DK, you are correct. The M/I companies are the new 800 pound gorillas, and it is they who are tightening the screws. Also, most lenders are unlikely to finance this high of an LTV in declining markets due to the much stricter reps and warrants that they must now make on each loan. This was a free-feel good policy change by FNMA.

DK · 1 year ago

Who is providing the mortgage insurance? .....Maybe that is why Fannie is willing to offer the full LTV , can't get those high LTV's anyway :)

Tom Vanderwell · 1 year ago

Morgan,

I think that we'd all be better off if everyone would ask one more question:
"In today's housing market, is buying a house without coming up with at least 3 to 5% down really a good idea?"

I think it's very healthy that we've gone back to requiring some "skin" in the game.

Keep on telling it like you see it.

Tom

morganb · 1 year ago

I agree Tom. This only works when homeowners actually own the home.

Jerry Fisher · 1 year ago

What Bull Shit. Let the loans go under as they will. We [the DC Gang] have "not learned" our lesson. One big mistake after another will ruin our country as there will not be enough solvent taxpayers left to bail this mortgage mess out. The bankers will in time buy real estate for 10 cent on the dollar as they did in the great depression. Perhaps this is why they call it "Great". Great for the bankers as they and their rich friends were only ones with money to "pick up" the bargins. History just repeats itself!

Steve · 1 year ago

Let me get this right. There are consumer groups out there that actually fought to make it easier for people to get suckered into purchasing a home in a declining market? With consumer groups like these looking out for you, who needs enemies?

T-BONE · 1 year ago

You tink I don't KNOW??? I KNOW!!!
YOU, MAYBE, MAYBE YOU DONT KNOW, I DONT KONW,
ALL I KNOW IS: I KNOW!!

Robert · 1 year ago

There the danger in "redlining." Perhaps the "declining market" theory is not purely "redlining", but it is a form of it. It causes blight.

Suppose you live in a "declining market." Nobody wants to buy in that market because just 2 zip codes away it is stable and they can purcase with less down. Due to this, the "declining market" continues to decline and is now an "untouchable neighborhood". Only those that can't afford anywhere else buy in a "declining market."

Economics play this role in the market today. Those with similar socio-economic status tend to gravitate toward each other. In a "declining market" policy, you accentuate the problem. You basically force the areas that are in the middle to either rise to the top or fall to the bottom and you get a "class war" ocurring. Those unfortunate enough to be in the bottom will never recover and will alway be in a "declining market." When a "declining market" does rise, it will be at a less than stellar rate compared to those that are NOT "declining markets."

I know, this happens today to some degree already. However, the impact of this is minimized because those that live in the areas of middle ground have a sense of security that they have a chance of rising values and someday moving. A "declining market" would remove that all important sentiment. Sometimes it is merely the idea that you can be great that keeps people from giving up, even if it is just a fantasy.

Robert · 1 year ago

Sorry. Exacerbate was the word I was looking for, not accentuate.