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Old 07-07-2018, 12:33 PM
 
218 posts, read 69,264 times
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Has a nexus been shown between Redlining charges against banks back in the '80s that led to Congress in effect mandating banks loan to folks with limited ability to service those mortgages to the collapse in '08? I wonder if the debt to income ratios were changed so that people who could manage a $250,000 loan were given, I don't know, $400,000 loans. It seems it wasn't long before a home that cost $50,000 sold a decade later for five or six times that amount.

Just wondering.
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Old 07-07-2018, 05:57 PM
 
1,481 posts, read 591,143 times
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When I bought my first house in 1983 mortgage companies had better deals than banks, though at higher rates. The better deal was they offered "no income verification" loans, so it was irrelevant how much you made. That was the start of the boom and every time I refinanced I got lower rates and took equity out. Refinancing a mortgage was basically taking out money as the value of the property continued to rise. I did that several times and never dealt with a bank. When I sold the house in 2006 I got 5 x what I paid for it 23 years earlier. However the boom was over. At that time I bought my second house. 12 years later it's worth about 80% of what I paid for it.

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Originally Posted by SFSGood View Post
Has a nexus been shown between Redlining charges against banks back in the '80s that led to Congress in effect mandating banks loan to folks with limited ability to service those mortgages to the collapse in '08? I wonder if the debt to income ratios were changed so that people who could manage a $250,000 loan were given, I don't know, $400,000 loans. It seems it wasn't long before a home that cost $50,000 sold a decade later for five or six times that amount.

Just wondering.
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