Home sales, job creation could rise with sensible lending standards
Original post made on Oct 15, 2012
Read the full story here Web Link posted Monday, October 15, 2012, 6:25 AM
on Oct 15, 2012 at 1:58 pm
Can't do this in California because it directly contradicts Governor Brown's job cutting/exportation strategy. Besides, the entitlement class would have to sue the banks because requiring 20% down for a house and requiring the income to pay a mortgage from "traditionally disadvantaged folks" is inherently racist.
on Oct 16, 2012 at 9:33 am
Dave Walden is a registered user.
I would not expect standards to ever revert to the early 2000's and in fact not even loosen at all in the foreseeable future. The savior of the first time home-buyer and those who don't have 20% down payment handy, FHA, is raising their up front mortgage insurance and monthly mortgage insurance so high that it is hard for anyone to qualify. An example, I was trying to refinance a client to take them from 4.625% interest rate to 3.75% on their FHA loan that they took out in 2010. The new payment with the new mortgage insurance monthly rate was $10 per month higher. FHA is experiencing losses and needs to shore up their position in the market.
With the Fed now buying up mortgage backed securities again, we are in line for inflation and that means higher rates. Higher rates and strict standards make for a challenging market for the home buyer for some time to come.
on Oct 16, 2012 at 1:48 pm
Wasn't it the "loose standard" that got us into the crisis a couple years ago? People have short memory.