Mortgage industry is tanking

[Surfah]

Originally Posted by hyrum

You mean the buyer will actually have to have some equity at closing and some verifiable income? How draconian!

You do know that the wave of creative financing, or more accurately, aggressive financing, is a large part of what was supporting speculation and driving pricing up sky high in most parts of the country? As usual the regulators and industry are doing the usual, closing the barn doors after the horses got out, which will make things get worse before they get better. As BYU71 said, I hope those who were loaning any amount to anyone with a pulse will go out of business rather than be rescued by Uncle Sam.

I agree too. Hopefully, I'll have enough flow to buy some of these people out of their homes this year.

[Solon]

Originally Posted by BYU71

I am in great hopes all these mortgage companies that should go under, do go under. No S&L bail outs.

A-freakin'-men. They've made their bed; let them lie in it.

[BlueHair]

American Home Mortgage is going under too. They have hundreds of millions of loans they have promised to buy, but can't. This could just be the tip of the iceberg. If the housing market collapses the global economy could be in serious trouble.

I never understood why people were getting ARMS when rates were under 6 percent.

Katie Couric is doing a special tomorrow night. I think she is going to talk about how there may be no money to lend in the near future. It'll be interesting to see what she has to say in her report.

[cougjunkie]

Hyrum i see your point however most of the subprime lenders have been weeded out already. Or they have changed there guidelines drastically. Now we are seeing A paper lenders fold. You know the ones that lend money to borrowers with perfect credit.

The most defaulted loan last year was not the 580 credit score, 1 month out of a bk 100% loan. It was actually a 720 FICO self employed borrower.

How many on this board when they bought there first house or any house for that matter had 20% to put down?

[Mormon Red Death]

http://articles.moneycentral.msn.com...uidedPath.aspx

Although I don't really like Fleckenstein he does make some good points

Jim Jubak's analysis

http://articles.moneycentral.msn.com...nchSpread.aspx

[MikeWaters]

Originally Posted by cougjunkie

Hyrum i see your point however most of the subprime lenders have been weeded out already. Or they have changed there guidelines drastically. Now we are seeing A paper lenders fold. You know the ones that lend money to borrowers with perfect credit.

The most defaulted loan last year was not the 580 credit score, 1 month out of a bk 100% loan. It was actually a 720 FICO self employed borrower.

How many on this board when they bought there first house or any house for that matter had 20% to put down?

we put down less than 10%.

[Solon]

Originally Posted by cougjunkie

Hyrum i see your point however most of the subprime lenders have been weeded out already. Or they have changed there guidelines drastically. Now we are seeing A paper lenders fold. You know the ones that lend money to borrowers with perfect credit.

The most defaulted loan last year was not the 580 credit score, 1 month out of a bk 100% loan. It was actually a 720 FICO self employed borrower.

How many on this board when they bought there first house or any house for that matter had 20% to put down?

I wonder how many of those "self-employed" borrowers were employing themselves as real-estate speculators.

We had 20% to put down because we both worked full-time for several years (before and after our marriage), lived in a shitty basement apartment, saved our money, and bought a condo well within our means in a moderately priced market. How revolutionary of us.

I understand we're the best-case scenario, and for those who live in crazy home markets (e.g. California), have abnormal expenses (such as medical), etc., 20% is impossible, but, for a lot of the country's housing markets, it's not impossible to do it old-school.

Hey, if the 0% down, 5% interest-only loan is right for you, so be it. But I think, generally, the predatory lenders and stupid borrowers must shoulder equal amounts of blame.

[Mormon Red Death]

the biggest problem is that people were buying too expensive of a house for their income. the average square foot of house in the 70s was around 1100 square feet. Its now 1700 square feet. Have families gotten bigger?

Another problem is that housing prices on the coasts are so high no young people can afford to live there. When my 1300 square foot house in Michigan would be worth close to 6 times its value in California there is something wrong

[MikeWaters]

I don't know how people do it in California.

My brother just moved to San Francisco and rents a two-bedroom place for 2k. I'm sure getting a house is far out-of-reach for him.

[Solon]

Originally Posted by MikeWaters

I don't know how people do it in California.

My brother just moved to San Francisco and rents a two-bedroom place for 2k. I'm sure getting a house is far out-of-reach for him.

Exactly. As MRD writes, people aren't as willing to put up with that little 1500 square foot starter home as they were 30 years ago. IMO, it's a combination of things - at least in the areas I"m familiar with - including the lack of new constructions that are moderately sized and priced. Decreased supply/increased demand has driven the price of smaller homes up, and some people - for "just a little more per month" jump to the McMansion neighborhoods.

California's situation pisses me off. My brother-in-law has an interest-only loan on a $400K house, pays a little extra on principal each month, and will have to re-fi in two years into a conventional loan. He's making it, but he's stretched pretty thin for that 1700 square foot ranch in Santa Maria. Meanwhile, programs for low-income families are putting a few lucky ones into 2500 square-foot new constructions for less than $1500/mo. - mortgage, not rent. The middle class is being strangled (granted, it's still better off than the really poor), but there's no chance of relief - esp. with California's enormously expensive taxes and programs.