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Myrina

(12,296 posts)

47. I see builders' signs ...

Wed Apr 3, 2013, 09:19 AM

Apr 2013

... on the highway leading toward the 'burbs "Own your own home for $679/mo!!!" (which coincidentally is about the same price in our metro area for an ok 2 bdrm apartment).

These vultures are betting that people aren't financially sophisticated enough to realize that $679 is
a. for the basic "no-frills" model in the shitty part of the subdivision
b. covers principal only, not Mortgage Insurance, homeowners' insurance and interest
c. that the initial interest rate is probably going to double or triple in 3-5 years
d. doesn't include monthly/annual HOA fees

They market to those $15/hr folks who just desperately want to own a home for their kids to grow up in, in a decent neighborhood, with access to newer schools. If it truly was only $679/mo, a family with 2 full time wage-earners at $15/hr could feasibly make it work.

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Obama administration pushes banks to make home loans to people with weaker credit [View all] alp227 Apr 2013 OP

It's deja vu all over again. nt OnyxCollie Apr 2013 #1

doh! gristy Apr 2013 #2

Yep, seems the politicians are serving their banker donors once again! n/t alp227 Apr 2013 #10

It's only been a few years, have we learned nothing? MrSlayer Apr 2013 #3

It was not delinquent homeowners that crashed the banks ... MindMover Apr 2013 #7

I know. They were the vehicle the banksters used to loot the place. MrSlayer Apr 2013 #19

Either you are or you aren't madokie Apr 2013 #30

What people are not realizing is that Drale Apr 2013 #4

+1 nt Live and Learn Apr 2013 #28

THIS^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ socialist_n_TN Apr 2013 #42

650 is pretty bad Yo_Mama Apr 2013 #62

Here we go again. MichiganVote Apr 2013 #5

What could possibly go wrong? subterranean Apr 2013 #6

What the hell??? lexw Apr 2013 #8

it worked so well last time putitinD Apr 2013 #9

Correct me if I am wrong... iandhr Apr 2013 #11

I don't think we have in the sense of making sure the bail out money reached main street... midnight Apr 2013 #31

Instead of public housing . . . caseymoz Apr 2013 #12

The problem wasn't lending to poor people geek tragedy Apr 2013 #14

Of course it was PSPS Apr 2013 #21

They're not proposing to bring back liar loans geek tragedy Apr 2013 #32

We already have artificially low teaser rates. Igel Apr 2013 #83

Since the vast majority of loans are fixed-rate geek tragedy Apr 2013 #84

I see builders' signs ... Myrina Apr 2013 #47

As I understand it, the percentage of mortgages that were sub-prime had soared to historic Flatulo Apr 2013 #25

Bigger problem was when 'prime' loans began performing geek tragedy Apr 2013 #36

And other debt Yo_Mama Apr 2013 #66

I'm in absolute agreement about "ability to pay" being the geek tragedy Apr 2013 #67

It's complex Yo_Mama Apr 2013 #69

Short-term there is a risk of loss of equity/down payment geek tragedy Apr 2013 #74

Yes, but the long term doesn't matter if the short term doesn't work Yo_Mama Apr 2013 #92

I would quibble that it wasn't the notion that geek tragedy Apr 2013 #93

Thanks for a great post! I'm sure it took some time Flatulo Apr 2013 #80

I got my first mortgage in 1986. $110k, 12.75% Flatulo Apr 2013 #68

Our lender threw a fit because my wife transferred geek tragedy Apr 2013 #70

Lol - we're a pendulum-y kind of people. nt Flatulo Apr 2013 #72

Please read #88 - an explosion in lending, this Reuters article specific to subprime auto loans n/t progree Apr 2013 #89

Auto and residential mortgages are completely different sectors of the economy. geek tragedy Apr 2013 #90

I know, but the article mentions subprime mortgage securities as another mini-bubble, although just progree Apr 2013 #91

Yep. Hassin Bin Sober Apr 2013 #51

Most people don't understand how complex mortgage lending criteria are. geek tragedy Apr 2013 #53

Also the "CRA did it" crowd magellan Apr 2013 #61

Government should never encourage private 3rd party loans. caseymoz Apr 2013 #71

So, people should be forced to pay cash if they want to own a home? geek tragedy Apr 2013 #75

Did I forget to mention grants? caseymoz Apr 2013 #76

How is the government supposed to raise enough money geek tragedy Apr 2013 #77

Really? We can't? caseymoz Apr 2013 #78

The problem is that private industry is not willing to take the geek tragedy Apr 2013 #79

You have to compare that $100 billion . . . caseymoz Apr 2013 #87

The pendulum has swung too far the other way. geek tragedy Apr 2013 #13

yep daybranch Apr 2013 #15

How did the conversation get here ???? Purplehazed Apr 2013 #22

Um ... Fact free generalisations denem Apr 2013 #23

Nobody is proposing giving loans to people geek tragedy Apr 2013 #33

+1 DCBob Apr 2013 #26

You left out the all the buyers from other countries. nt Live and Learn Apr 2013 #29

Here in NYC, absolutely. nt geek tragedy Apr 2013 #34

He should have nationalized a few instead SHRED Apr 2013 #16

Obama nationalized the biggest lenders - Fannie & Freddie denem Apr 2013 #24

Private equity firms are buying up foreclosures by the billions of dollars. Fuddnik Apr 2013 #17

^^ This ^^ Myrina Apr 2013 #45

So people should pay their landlords' mortgages instead? geek tragedy Apr 2013 #56

The Fine Print: What The Street doesn't like is the facility to refinance existing mortgages denem Apr 2013 #18

+1 nt geek tragedy Apr 2013 #50

This is all we have left Mnpaul Apr 2013 #20

If you can't afford it, real estate is the riskiest investment you can make because its leveraged. dkf Apr 2013 #27

You realize FICO scores are irrelevant to the ability geek tragedy Apr 2013 #37

They were approving amounts based on my income. dkf Apr 2013 #38

Indeed. Earth_First Apr 2013 #39

Smart. dkf Apr 2013 #41

Obama isn't talking about encouraging banks to lend to people geek tragedy Apr 2013 #48

I couldn't have afforded to pay back what they were willing to lend to me... dkf Apr 2013 #52

You're conflating credit scores with DTI ratios. geek tragedy Apr 2013 #54

Yeah they thought I could pay off that crazy amount too...and by myself! dkf Apr 2013 #58

The limit for conforming mortgages is 28% of pre-tax income, with geek tragedy Apr 2013 #60

You can tell the lenders that at your next mortgage application...........I'm sure they will listen lunasun Apr 2013 #57

FICO has nothing to do with income. They check both your FICO credit score geek tragedy Apr 2013 #59

A FICO score of about 520 is generally the minimum that will qualify for a mortgage lunasun Apr 2013 #64

FICO is one of many variables. geek tragedy Apr 2013 #65

Please, loan sharks, get more customers! JackRiddler Apr 2013 #35

Stupidity rules. dipsydoodle Apr 2013 #40

Isn't that how 2008 happened in the first place? Myrina Apr 2013 #43

He's not the same as Bush! Doctor_J Apr 2013 #44

No, he's not. Anyone who understands mortgage lending would tell geek tragedy Apr 2013 #55

Dump the Trans Pacific Partnership and at least keep those jobs here. amandabeech Apr 2013 #46

The lenders own the homes untill they are paid off. Why aren't the lenders paying the property tax?? Sunlei Apr 2013 #49

"assuring banks they won't face recriminations" Enrique Apr 2013 #63

Because it worked so well the last time? slackmaster Apr 2013 #73

Weak credit wasn't the problem davidn3600 Apr 2013 #82

O RLY? slackmaster Apr 2013 #86

Gosh. Where are Sid Dithers, Mineral Man, and NYC Skip Occulus Apr 2013 #81

Knives allowed on planes, banks urged to make loans to people with weak credit... forestpath Apr 2013 #85

I thought maybe this was Chicken Little stuff, then I read this -- Subprime auto loans explosion progree Apr 2013 #88