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Old 10-05-2008, 07:12 PM
 
Location: Asheville, NC
11,816 posts, read 26,791,472 times
Reputation: 4541

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What do you think about it? I don't think it's going to help the average Joe. I think it's going to just help the banks out. Do you think that they will start lending money to responsible people now? I think this is a big part why houses haven't been moving.
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Old 10-05-2008, 09:07 PM
 
Location: DFW, TX
2,935 posts, read 6,124,464 times
Reputation: 571
Quote:
Originally Posted by beckycat View Post
Do you think that they will start lending money to responsible people now?
Banks were lending to people with solid credit... that never stopped.

Quote:
I think this is a big part why houses haven't been moving.
Nope. Houses aren't moving for a multitude of reasons. A lack of qualified buyers is one reason... because when you approve loans with no documentation with no money down, you drastically increase the potential market for buyers. Builders increase inventory, prices rise due to demand, people start taking out home equity loans to renovate or flip homes, and a bubble emerges.

Now we have homes on the coasts that had risen in value way faster than a healthy rate, people upside down on mortgages, and a large inventory of homes on the market. And people who don't already own aren't looking to jump into a house for $400k, not knowing if it's even going to be worth $300k a year from now.
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Old 10-06-2008, 02:28 PM
 
Location: Fredericksburg, Va
5,189 posts, read 13,347,698 times
Reputation: 7364
The problem was that the banks were directed to lend to the "poor unfortunates" who coulcn't afford to buy a home! I know everyone seeks home ownership, but you have to be able to PAY THE MORTGAGE!!!!! Jeez.
This bill isn't going to help the "average Joe"--it's going to cost all of us!
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Old 10-06-2008, 02:32 PM
 
Location: Santa Monica
4,708 posts, read 7,714,647 times
Reputation: 1029
Quote:
Originally Posted by cb at sea View Post
The problem was that the banks were directed to lend to the "poor unfortunates" who coulcn't afford to buy a home! I know everyone seeks home ownership, but you have to be able to PAY THE MORTGAGE!!!!! Jeez.
This bill isn't going to help the "average Joe"--it's going to cost all of us!

What a ridiculous crock! The problem mostly was that the firms doing the mortgage origination were not the ones who ended up owning the mortgages. The mortgages were packaged into bundles and sold as "asset-backed securities" to banks and pension funds. The problem was, the quality of the mortgages, many of which were originated fraudently and to those who in fact could not qualify except under unusually generous terms, was lower than advertised to the ultimate investors. How such securities could have been marketed as investment quality while not being amenable to proper risk evaluation and assessment, is beyond me! That would indicate failures of both accounting (lack of transparency) and underregulation by the relevant bureaucracies.
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