Feeling like 2006... (Nice: foreclosures, squatters, house prices)

[CaliRestoration]

Originally Posted by asdfer

And what percentage of it is bad parenting?

Takes two to tango.

Agreed.

[expatCA]

Originally Posted by asdfer

And what percentage of it is bad parenting?

Takes two to tango.

So many parents today are losers.

They have been brought up to think money is everything, kids should be treated like adults and be able to do as they please, never discipline them, buy them whatever they want, encourage them to go to college even if it does not fit their desires or abilities so that they are burdened by debt. Parents who buy into the popular propaganda can't really help their kids.

[Lallo]

I'm starting to think that FHA is the new subprime. 2 friends currently bought homes on fha loans. 1 bought with 20% down but that came from mommy and daddy. Eventually there will be a ceiling that is reached with both price and the amount of buyers that can afford current prices. I know this is a small pool to make such a broad statement but it got me thinking just how many FHA buyers are out there stretching themselves out.

[Electrician4you]

Originally Posted by Lallo

I'm starting to think that FHA is the new subprime. 2 friends currently bought homes on fha loans. 1 bought with 20% down but that came from mommy and daddy. Eventually there will be a ceiling that is reached with both price and the amount of buyers that can afford current prices. I know this is a small pool to make such a broad statement but it got me thinking just how many FHA buyers are out there stretching themselves out.

I agree if you're talking the 5% down crowd. But 20% true cash down not really, but it depends on where it comes from. Mom dad meh it's probably ok. Bridge loan 90/10 or 80/20 not so much. That's just a two loan system.

20 down 30 year mortgage is the bedrock mortgage loan. It's traditionally been the best most stable loan structure. The problem comes when you have people who have the let's pull the equity to do or pay off xyz or have hocus locus loans like no money down adjustable rate or the old NINJA loans.

Even if some fail it will take a economic downturn to kill housing. And regardless of the downturn people are going to need a place to live. Banks know this. They will do what has been deemed successful. Constrict the flow of houses on the market to keep demand high. Remember, the foreclosure rules have been changed.
If you're thinking another downturn while there may be one it won't be like last time.

[CaliRestoration]

FHA should have gone away with Freddie and Fannie. The government should not be in the business of offering subprime loans.

[ILovePopcorn]

I wish I had the money for a downpayment

[ihatedcu]

Putting down 20% is stupid, when we live in a non recourse state. Put down 5% and pay pmi. Underwater, walk. Appreciate, refi. Only suckers put a down payment on a car loan.

$500,000 house
$25,000 down
$75,000@3% interest is is $2250. In 10 years, it's $100,793.
PMI is $3562/year.

20% down lose job, foreclosure. 5% down lose job, put house for sale and pay using $75,000 in the bank.
I sleep better at night with $75,000 in the bank.

[ihatedcu]

Bank C has 2 loans in their profilo. Buyer A with 20% and Buyer B with 5% down. The economy tanks and house prices are down 20%. Who gets foreclosed first?

[asdfer]

Originally Posted by ihatedcu

Bank C has 2 loans in their profilo. Buyer A with 20% and Buyer B with 5% down. The economy tanks and house prices are down 20%. Who gets foreclosed first?

The one that doesn't pay the mortgage.

[expatCA]

Originally Posted by asdfer

The one that doesn't pay the mortgage.

Yep, if both are paying nothing happens. Now the one with the 20% down has a lower payment so that helps.