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First of all Just purchased greendot Discover Card,need to know if there is a balance on it? Thanks for any answer or 2. Another quick question... Link:. |
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I would like to know the answer too. Anyone here know what is the answer. I'll do some investigation and get back to you if I bump into an useful answer. You should email the people at Discover Card as they probably know..
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Absolutely agree. Article states almost 15% of FHA loans are past due...
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Cnn put up an article the same day that homes valued over a million dollars were in default at a rate of 12%.
I love splashy headlines.. |
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3.5% is fine if it's attained through the buyer's own resources...the problem lies in "gift" funds, etc. Also the fact that many loans sold to FHA are still being shoved in that don't meet guidelines..
If we start requiring 20% down - values plummet another 40%, and people like myself will be 50% underwater or more, even worse than it already is. It's like trying to kill a fly, but instead of a flyswatter, using an Uzi... |
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The minimum to get in a door SHOULD be raised. Let's face reality...the person who cannot scrape together more than $3500 to put down on a $100K house is in over their head before they even get started. If someone is THAT worried about having funds available, then they might look at getting a foot in the loan door ahead of time and doing a signature loan and locking the money up in a CD somewhere for a year or two (which further seasons the money)..
The days of getting into a house JUST BECAUSE ought to be gone but they aren't...and $3500 per $100K of purchase just doesn't put enough incentive out there to keep people from deciding that it is easier to walk away from the note because of some perceived paper loss (never mind that no loss is incurred unless one actually had to sell and was upside down, which is NOT the usual situation)... |
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IMHO Besides lowering LTV to at least 90%, they should lengthen the waiting period since the previous foreclosure to discourage frequent filers/walkaways..
The current FICO cutoffs and DTI caps seem too lax as well. The guarantee FHA mortgages bear to continue to offer low APRs to subprime risks gotta is a cost on the system, it's not free money. Nor is it meant to encourage flippers with little interest in putting money down for the long haul > the LTV and previous foreclosure waiting period suggestion.. This post has been edited by. Nothingtolose. : 20 January 2010 - 01:06 PM.. |
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"Tiering" LTV on score makes some sense...also, I agree on DTI...the "official" DTI of 28/36 is probably OK for most, but they often get lax and allow a back-end to nearly 60% - which, if you look at it is pretty ridiculous. Most people barely BRING HOME 60% of their gross pay, and that number does NOT include gas, food, utilities, etc...it's not workable...
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If one looks back 40 years ago 20% down was the standard and foreclosures were very low. Even if the bank had to foreclose there was generally no loss to the bank. The current market values are unsustainable and were only fueled by fools and speculators. In my area a starter home is $600,000 with your average executive home starting at $1 Million. While median income is slightly above the national average it's obvious that most can't afford to own a home here. If one looks at historical averages the typical home increased in value approximately 3% per year for the previous 100 years prior to the most recent boom market.
Unfortunately those drinking the koolaid bid up the prices as much as 30% annually in many areas and now the market needs to reset. Taxpayers should not have to subsidize those that made poor decisions. Keeping the market value of homes artificially subsidized only prolongs the inevitable collapse, it does not stop it. While values of existing homes will plummet what is wrong with that? It's funny how I can go offshore and by an equivalent house for less than 20% of what I would pay here. Getting a mortgage is easy as the banks usually want 20 - 25% down. The banks don't care where the money comes from as they know their market is stable and if one doesn't pay they will just take the house. It's simple and the way it should be... |
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I'm glad to see this. The amount of money required was too low..
The article in the New York Times actually stated that 18% of FHA loans were in foreclosure against the national average of 12%. That's a big deal considering that FHA loans are 40% of all home loans right now.. The FHA is officially out of money they are under the minimum set by congress, so no matter how much people complain, things are going to change, and I have a feeling we'll return to a more 1970s/1980s system of home ownership.. The old folks on here will remember the time when you were considered lucky to get a home loan at 9%, if you even got one at all. This housing problem has been brewing for more than 15 years and we'll see a reversion to the old way of doing things... |
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It doesn't mean Jack Squat that I can get a house for "20% of what it costs in XXXXX" if the house I have in XXXXX can't be sold until 2027 for being so underwater..
I bought a house I COULD AFFORD, but still end up f***ed for 20 years in this scenario. While I personally won't walk, others will, turning my neighborhood into a virtual war zone that I cannot escape... |
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WTH do you live that there are 100k houses??.
I can't touch anything here for under 300k.. |
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Sometimes it doesn't make sense to buy. I sold my primary house back in 05 and have been renting for almost 5 years. My rent is well under half of what the mortgage would cost me. Of course I would rather own my house, and by own I mean outright with no mortgage; however if it doesn't make financial sense I won't do it...
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Even with the huge drop here to get something that is not trashed you need to spend 240K or more..
Right now there is a dearth of properties in the price range we're looking at (500-700K). If we wanted small house there are tons of options or if we wanted a million dollar house at a country club there are tons of options. The middle of the market is barren. kind of sucks... |
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Who are you calling old?!.
My first mortgage in the late 80s was 10.25%, PLUS 3 points, AND I put 50% down.. Jeez... |
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In many of the major metropolitan areas in Texas, there are houses in the $100K range that have more than 2K square feet...yeah, they might not be the newest thing in the world, but many people prefer the older construction (ie. pre-1985) that sits on good-sized lots and has trees that look like they have been there for many years..
Does that mean ALL houses in the area are that cheap? No. As I have posted previously, houses very close to me in west Austin sell for much more than that. But if you are getting into a house that sells for more than a half-mil, then you OUGHT to be prepared to put up more than $20K as down payment... |
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Just kidding. was making more in light of the fact that I'm 22 and so can't actually speak to it firsthand..
My father was complaining the other day because the mortgage he got in 1986 was at 9%, plus 3 points, and they had to put 35% down. Don't still own that house but put 30% down on this house at 2 points and 8.5% in 1993, 15yr fixed. Never bothered to refinance. But he had a point...you used to have to be really invested to buy a home. And that's the way it should be, because it's a substantial investment in your own personal quality of life... |
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I guess it'll piss most off to know that I'll be paying (with Discover card) nothing down on my fourth house and using va backed mortgage.
I bought my first house for cash however and I've never been foreclosed on. I intend on keeping my 60k in the bank....where I have it to fall back on in case of financial disaster because I cant pay my mortgage with equity, nor can I eat it or use it to keep the house heated and in good repair. IMHO I think a lot of this housing absurdity has to do with people treating their homes like credit instead of shelter. I also happen to think that most of the working class I know would fight to the death to hold onto their homes but a fair amount of them have no budgetting skills and again...mistakenly believe their homes are a credit card. Its absurd. I also love how 1mil plus homes that dont qualify for government programs are in default at a rate of roughly 12% but no one wants to talk about that. 2000 sqft here if it's habitable is around 350k with almost no lot size, no garage, and will probably need a fair amount of updating.. |
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...and you are going to take that.
MUCH HIGHER PRICE. **. On the house because you waited to save that 20%. OPPORTUNITY COST. **. NOT ASSUMING THE HOUSING MARKET IS GOING DOWN FOREVER.. |
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I agree. These days with relative wage deflation, it's increasingly difficult to save a down payment while paying (with Discover card) someone else's mortgage in the form of rent..
I have an FHA mortgage. Seems reasonable to me. A lot of the loans that are in foreclosure are there because banks not subject to the CRA slid people into loans they didn't qualify for.. This post has been edited by. Athensgaguy. : 20 January 2010 - 08:55 PM.. |
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The house we bought was like $30,000 under what we qualified for....
We save $200/month by. NOT. Paying rent. This post has been edited by. GEORGE. : 20 January 2010 - 09:18 PM.. |
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The truth is, FHA worked with low down payments just fine for years..
The problem (with FHA specifically, but overall as well) now, I think, is a combination of several factors:. 1. Job losses. 2. Overvaluation of properties, partially driven by easy FHA loans, but mostly driven by ridiculously low payment Option ARMS and Interest-Only loans combined with stated income, remember, for a few years there (2002 - 2006) NOBODY was even doing FHA.. 3. Allowing the back-end (and front-end) DTI to go MUCH higher (almost double) than the 28/36 that guidelines suggest. 4. Allowing brokers and lenders to sell just about *anything* to FHA without verifying that they truly met guidelines. 5. Trying to use FHA as a subprime substitute, instead of it's intended purpose, which is for first-time buyers that still have decent (even if limited) credit and income.. This post has been edited by. Hairmetal4ever. : 21 January 2010 - 08:48 AM.. |
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Does anyone know the stats on foreclosures of which are primary residences versus investment properties?.
I still think investors drove the market up to this point with people hoping to make some easy cash and for many years many people did... |
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Investment in real estate, to me, means buying a distressed property.
Well. Below the fully repaired market value (or occasionally lucking out on price due to a borrower in trouble), and fixing it to true full market value.. In the recent bubble, investment became buying AT market value, waiting a year, and flipping for $40k more when only the market bubble itself was the reason for the increase. When that ended, the "investors" crashed.. Even NOW, you can make money using the first definition if you're smart, but it takes WORK. Too many people assumed that anybody could make millions flipping real estate and working 5 hours a week to do it... |
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Personally, I think that the DTI is more important than a credit score when it comes to securing a mortgage. We all know that with the rampant errors on most people's credit reports, combined with the amount of identity theft in this country, that a credit score should be insignificant in determining a borrowers ability to repay a loan. However, that is not the case, and requiring people to put down a larger down payment isn't going to solve the foreclosure problem; we have to look at a borrower's ability to repay which goes back to the DTI...
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I think DTI, down payment, savings, job history should be by far the most important factors...
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Agreed. In fact, since some people legitimately prefer to keep cash liquid and not use all of it as a down payment, why not something like this....
If you put >20% down, then only 2 months worth of mortgage payments in savings is required, but if you do 3.5%, you should have enough in assets (even if a 401k or IRA) for 6 months of payments or more... |
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I understand the frustrations of many and agree that the buyer should have more "skin in the game". However, IMO, the current crisis is such a huge combination of factors from both sides of the equation (lenders & borrowers). The chosen ignorance of consumers remains, but is begining to turn somewhat while the regulation of the actual loan products has been slow..
I bought a home recently under the FHA program yet chose to put down more than my required 3.5% and paid my own closing costs as well. I waited until I found a good, solid home in a great school district and offered $95,900 against an asking price of $119,900 (originally listed at $149900 7 months earlier). There was another bid the same day by another buyer and they asked for a max bid from both of us. My pre-approval was for $129,900, but I had determined that I was uncomfortable with that high of a payment and had previously set my own max of $109,000. I put in my max bid at $103,000 couple with a letter to the sellers to be presented by my agent with my offer. My offer was accepted obviously.. The point is that the bank was willing to extend me A while I had to slow down and figure out my own comfort level of B. If more people would just learn to live within their means, things would get much easier for all of us. I didn't have $10,000 plus closing costs to pay out because I insist on having 3 months worth of all living expenses in savings and won't touch it. The rate was great (5% fixed/30 years/assumable) so it made complete sense for me to buy now before the fed raises rates... |
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Ya, and I personally would not like to rent forever. I have 4 kids and being in an apartment or a rented house is just NOT something I want. So if I'm paying (with Discover card) $1400 for a rental home when I could purchase and be paying (with Discover card) $1100that's a $300 a month savings for the family. I don't have to worry about the 1k damages the kids could do with the carpets or walls or anything else. I can put that $300 away each month so when something goes wrong with the house, I have that money sitting there..
It's hard to save money when you pay more to RENT than you do to OWN.. Even if I worked outside the home, I'd have to pay close to $2k a month for daycare and well, what's the point when I'd only bring in MAYBE $200 or so which would be eaten up in gas driving to and from work. We haven't bought another vehicle because we don't want another car payment, plus we didn't want that to factor into when we go and buy a house... |
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People need to be more invested in their house IMO. 3.5% down just isnt enough really, 10-20% sounds much better...
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