The Next Housing Crisis Is Brewing

• Report this Comment On June 19, 2009, at 4:07 PM, stockjock43 wrote:

  I sold 2 FHA properties recently and the down was 3% ... BAC is doing one of the loans....

  I was thinking the same thing ... luckily not alot of sellers want to deal with FHA red tape so it could be worse

• Report this Comment On June 19, 2009, at 7:46 PM, georgenips wrote:

  The down payment is 3.5% on an FHA loan. The $8,000 tax credit cannot be used for a down payment but can be used for closing costs. I wish people would get their facts straight before writing these articles.

  Fannie and Freddie have increased their business lately and so has FHA. The reason is that they are the only ones lending any money for mortgages. They all have more stringent guidelines that they have been implemented in the last couple of months.

  The part about Fannie and Freddie taking on the riskiest loans does not apply to the new loans that they are originating. Those new loans are for houses that will appreciate faster and be worth more in the next few years then the ones done a couple of years ago. Think about it, would you rather lend two years ago when the prices of homes were inflated or today when the house values are at a substantial discount.

• Report this Comment On June 19, 2009, at 8:16 PM, rdotson310 wrote:

  I dont take this perspective at all. What got us into the mess was banks who loaned using varible or interest only, to as far as no money down and as little as six months giving cash out loans. All the time knowing that in two three years down the line that their costomers would see a doubling of payments. They seen huge profits just around the corner, but blinded by their greed they failed to realize that a lot of the people would not be able to pay a doubleing in their payment it only took that slight downturn to have other borrowers with regular loans to become upside down in the value. There is alot of documentation that the banks knew this was coming. Using historic figures the vast majority of falling housing prices is absorbed by the consumer but because of the high percentage amount people where upside down far more people walked away from their home than in previous times.

  Banks for years now have been saying they can self regulate. Media and people in general have been very leinient with banks to this end. It is the responcibilty of the bank to give loans to people who can reasonably pay back the loan, not make it easy to get a loan so you can rip them off later.

  As an investor I was heavily invested into banks and other financials, so Im not saying banks are bad. But lets look at who really got the money here. The money went to the banks, shareholders lost almost everything, their dividends, the value of the stock. The consumers where ripped off by banks giving out easy loans so they could gouge them three years down the road. The tax payers bail out the bad loans the banks reposes the property. They are now left with no responcibility to their shareholders, they dont have to pay little or nothing in dividends. They receive money for the losses from the tax payer. They now have the property back from the borrower. All the while crying how abused they are and hiding behide a corporate umbrulla that spreads the responcibility so thin amongst so many that no one ends up responcible.

  As far as FNM and FRE my feeling is they are victums of the banks too. While between them they do hold close to 60% of all mortgages they held less than two percent of all bad loans, until constitutional changes where made that required both companies to purchase bad loans from the bank. Banks win again, ur I mean Executives win again.

• Report this Comment On June 21, 2009, at 1:56 PM, mikeleases wrote:

  I do REO properties in Southern California and do mainly FHA loans with 3.5% down plus closing costs etc.Three of my current properties are in escrow and the buyers are all First Timers. On May 29th HUD issued that "effective immediately" the $ 8,000 tax credit could be used concurrently with closing costs etc. BUT the buyer would have to close with their own funds first and THEN get the tax credit.Does ANYBODY in America know the mechanics of how this process WORKS?? I have asked the lenders,colleagues,the HUD website,and numerous people in the business-KNOWBODY knows.We know the buyers/borrowers GET it-we just do not know HOW.....!!! HELP please!

• Report this Comment On June 22, 2009, at 9:17 PM, TyrantBone wrote:

  Although I agree with another comment about the facts on this article not being straight, I did read something different.

  From what I read, the $8,000 can now be used for the down payment. The reason we aren't able to do this today (the way my current lender explained it) is because the legislation just passed. Once the legislation passes, the banks then need to receive the guidelines from the government and start creating their own guidelines (rules) on how to use this. When my lender inquired about this, he was told it takes a month or so before everyone can actually start using this.

  One other thing that isn't correct about this article is that the $8,000 tax credit CANNOT be used as your 3.5% down. However, if you come up with the 3.5% yourself, you can then use all or part of the $8,000 tax credit to increase the amount of your down payment or use it towards closing costs. Letting people use the credit as their down payment would be disastrous.

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