Realtors want down payment requirements lowered | July 29, 2011 | Pleasanton Weekly | |

Pleasanton Weekly

Real Estate - July 29, 2011

Realtors want down payment requirements lowered

Buyers should be tested on ability to repay loan

by Jeb Bing

The National Association of Realtors is urging regulators to go back to the drawing board on the proposed Qualified Residential Mortgage rule.

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Posted by Frank
a resident of Another Pleasanton neighborhood
on Jul 29, 2011 at 9:46 am

It was only six years ago that our leaders, Democrat and Republican alike, were pushing zero money down home loans.

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"Thousands of would-be home buyers without any money for a downpayment would be eligible for government-insured financing under a proposal that will be offered by President Bush in his fiscal 2005 budget.

Hailing the "zero down mortgage" as "the most significant initiation by the Federal Housing Administration in over a decade," federal housing officials said the plan to eliminate the normal three percent minimum downpayment will remove the single greatest barrier facing potential first-time home buyers."

How quickly times change. We seem to swing from one extreme to another. Sanity has to be somewhere in between.

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Posted by resident
a resident of Downtown
on Jul 29, 2011 at 10:52 am

Of course realtors want to go back to zero down. They want to keep sucking up those 6% commissions. If realtors had to pay the government a refund of all commissions from people who stopped paying their mortgages we would have one huge slush fund. The taxpayers could stop getting stuck paying for the greed of the commissioned realtors and the stupidity of the non-qualified buyers who should never have bought a home in the first place.

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Posted by No!
a resident of Another Pleasanton neighborhood
on Jul 29, 2011 at 11:09 am

Why would they want the down payment lowered? That is how we got into this mess in the first place. For me, since I put down a large down payment, I plan to do what needs to be done to keep my property (ie, I do not plan to use my house as an ATM)

The problem with people who put little or no down payment is that they start using the property as an ATM and then they find it easy to walk away and foreclose. They are not losing anything, right?

Realtors need to stop their nonsense. Go back to school and get a different job rather than trying to hold on to the no qualifications, seldom a college degree required type of job you now have as a realtor! Realtors played a big role in the housing crisis, it is time they stop!

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Posted by Sam
a resident of Oak Hill
on Jul 29, 2011 at 1:14 pm

""Strong evidence shows that responsible lending standards and ensuring a borrower's ability to repay have the greatest impact on reducing lender risk, and not high down payments," he added."

Ummm. How can one have a "responsible lending standard" unless the buyer puts down a reasonably high down payment? However the Congress and regulators rework the lending standards, they have to abide by one important rule: The lending standard has to make fiscal sense for the lender so that the lender is covered in case the borrower defaults on the mortgage or walks away from the house. Zero percent down does not make fiscal sense for the lender, and we've seen how borrowers will take advantage of that fact. 20% down makes fiscal sense for the lender, since it discourages people from defaulting and covers the lender if they do default. I hope the lawmakers don't lose sight of these simple facts and forget what happened during the housing bubble. Unfortunately, it appears that the NAR has already forgotten.

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Posted by Former CA loan rep.
a resident of Another Pleasanton neighborhood
on Jul 31, 2011 at 11:19 pm

Neighbors and lenders need to know the buyers are 'solid'. There use to be a list of standard verifications. There was and needs to be 'guaranteed' employment of sorts. IF employed in current position with a long-time,solid employer, but employed there less than 3 years min., then a letter from employer that the person and position were expected to continue was part of the loan application. Also, past bank statements to show no recent deposits to show you have funds and can maintain the home and payments for 6 months min, separate from paycheck. Copies of a year's bank statements, paycheck stubs for a year, two years IRS returns, etc. etc.
Very strick if self-employed, 2 years copies of everything, plus 20% and money in the bank. Rental property all that plus 25% down.

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Posted by Former CA loan rep.
a resident of Another Pleasanton neighborhood
on Jul 31, 2011 at 11:31 pm

We certainly won't be allowing Barney Frank and Maxine Waters to be in cahoots with Fannie Mae and Freddie Mac, and ACORN, dragging everybody out of the ghetto and telling to 'step right up and come get yer house "....never again.
BUT, our bankers should exercise reasonable judgement, as should appraisers, for solid employees who do meet the checklist.

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Posted by Gettin' There
a resident of Valley Trails
on Aug 1, 2011 at 5:27 am

Given my recent salary freeze, pension cutbacks and all the money I'm about to save from our reducing the nation's debt, I can't wait to put massive savings into our bank account at no interest in order to buy that dream house.

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Posted by Cholo
a resident of Livermore
on Aug 1, 2011 at 5:19 pm

If you can't afford the down payment, then you can't purchase the property...problem solved!