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Old 05-23-2018, 08:37 AM
 
595 posts, read 375,721 times
Reputation: 1021

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https://www.americanbanker.com/news/...-frank-reforms

House Republicans ultimately agreed to let the Crapo bill through as is but the Senate will separately consider added reg relief proposals — independent of the bipartisan reg relief package — passed by the House.

“I wish it did gut Dodd-Frank. It didn’t,” Hensarling said of the Senate legislation during the House debate Tuesday.

The bill’s most significant provision raises the asset threshold for “systemically important financial institutions” from $50 billion to $250 billion, reducing the number of those banks from 38 to 12. Banks between $50 billion and $100 billion in assets will see immediate regulatory relief, as they will not be subject to the enhanced regulatory scrutiny from the Federal Reserve. For those between $100 billion and $250 billion in assets, the Fed has the discretion to determine if they must continue under the prudential regulatory regime.

The bill also dials back the Volcker Rule’s restrictions on proprietary trading, exempting banks with less than $10 billion in assets and total trading assets and trading liabilities below 5% of total consolidated assets.

Link on the "Crapo Bill"

https://www.forbes.com/sites/norbert...ce-dodd-frank/

Draw your own conclusions based on what's stated.

Last edited by photogal9; 05-23-2018 at 09:26 AM..
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Old 05-23-2018, 09:51 AM
 
Location: Raleigh NC
7,754 posts, read 6,110,007 times
Reputation: 6882
Quote:
Originally Posted by Larry Caldwell View Post
The average 30 year mortgage hit 5% this week. People will be squeezed by interest with each subsequent increase. I expect home prices to level off in most markets.


One, I have no doubts that the people who are buying at the top of their budget will have to adjust the budget. Or if the top of their budget is the minimum house, won't be buying. But I would put these Buyers at ~60% of the median house price - it's the low-end Buyer/borrower.

Others may adjust their budget, since a 1% rise in interest rates is about a 12% decrease in $ amount borrowed.

However, one big difference I see - anecdotal evidence, I know - is that today the clients I have are NOT buying anywhere near the top of their budget. So yes, 12 years ago, if the lender said they'd approve you for $400K then by golly folks were spending very close to that. There was a lot more "ride the appreciation wave and upgrade homes every couple of years". Still, the rate of foreclosure for my clients was ZERO in 2009-2013. They just had to wait extra time to sell - which is why average term has gone from 5 years to almost 10 and stayed there.

Today, folks are putting more money down, borrowing well below approval levels (I'd guesstimate 70-80%). So if rates go up and they lose 12% of their purchasing power, they're still within their approval range.

I wonder about the craziness in CA - in the Silicon Valley area. Those folks aren't getting mortgages over $1MM based on ability to repay. They're putting huge amounts of paper worth down.

Given the inventory crisis, simple supply and demand tells me there's no way the lack of inventory is quickly changed. We could lose HALF the Buyers, and inventory would still not be in balance. And a rise in rates could have a greater effect on the Sellers that aren't selling - they will not be able to upgrade homes as much as they assume - a 6% interest is a heckuva lot more expensive than a 3.5% they refinanced to in 2011-2014.
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Old 05-23-2018, 10:10 AM
 
Location: Raleigh NC
7,754 posts, read 6,110,007 times
Reputation: 6882
Quote:
Originally Posted by photogal9 View Post
https://www.americanbanker.com/news/...-frank-reforms

House Republicans ultimately agreed to let the Crapo bill through as is but the Senate will separately consider added reg relief proposals — independent of the bipartisan reg relief package — passed by the House.

“I wish it did gut Dodd-Frank. It didn’t,” Hensarling said of the Senate legislation during the House debate Tuesday.

The bill’s most significant provision raises the asset threshold for “systemically important financial institutions” from $50 billion to $250 billion, reducing the number of those banks from 38 to 12. Banks between $50 billion and $100 billion in assets will see immediate regulatory relief, as they will not be subject to the enhanced regulatory scrutiny from the Federal Reserve. For those between $100 billion and $250 billion in assets, the Fed has the discretion to determine if they must continue under the prudential regulatory regime.

The bill also dials back the Volcker Rule’s restrictions on proprietary trading, exempting banks with less than $10 billion in assets and total trading assets and trading liabilities below 5% of total consolidated assets.

Link on the "Crapo Bill"

https://www.forbes.com/sites/norbert...ce-dodd-frank/

Draw your own conclusions based on what's stated.
what conclusions do you draw?

I know enough about it that medium-sized banks - generally only located in a region - were required to play by the same rules as the ones who truly created the crisis. It took "too big to fail" and said a $50B bank was big.

And the smaller banks - those under $10B - weren't trading over 5%. they're lending them out.
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Old 05-23-2018, 10:13 AM
 
Location: New York Area
13,402 posts, read 5,203,318 times
Reputation: 10753
Quote:
Originally Posted by Nanny Goat View Post
It's crazy. I heard this today, as a matter of fact, from someone on a different board that lives in Dallas about how bad it is there. All over, I've heard of people buying houses sight unseen. That's the definition of insanity folks. I'm sorry, but that's nuts. Waiving inspections, too, I've heard. Why not just wear a sign "I'm a stupid buyer."
Quote:
Originally Posted by Greeniejeans View Post
You need your brain examined to buy sight-unseen, waive inspections, or pay over asking price. Insanity.
You may do just that if you're getting 100% financing. My understanding, though not legal opinion, is that it is very hard, in Texas, for a lender to get a deficiency judgment if the sale under the deed of trust doesn't yield sufficient proceeds to pay off the loan. Thus for the buyer it may be "heads I win tails you lose."
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Old 05-23-2018, 10:25 AM
 
126 posts, read 41,208 times
Reputation: 299
Between rising interest rates, stagnant wages, and now the Dodd Frank issue...housing will slowly implode again. If you are able to wait it out and buy with cash, you might get a great deal in a year or two.
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Old 05-23-2018, 10:45 AM
 
10,265 posts, read 6,491,094 times
Reputation: 10837
Quote:
Originally Posted by Greeniejeans View Post
Between rising interest rates, stagnant wages, and now the Dodd Frank issue...housing will slowly implode again. If you are able to wait it out and buy with cash, you might get a great deal in a year or two.
Or you might be priced out of the market and be a renter for the rest of your life. Slowly implode does not mean even if your scenario is right that people are going to be foreclosing left and right and selling their homes for peanuts. Just because a few provisions for the big banks changed it does not mean that the small provisions like explaining a $100 deposit is still not in place. When you see dogs getting mortgages let me know.

Buy now or rent for the next 30 years. I have nothing to gain from people heeding bad advice that the sky is falling. I bought a home. Have no intentions of selling or renting the home, i don't work in mortgages or real estate. My best advice is if you can afford to buy a home less than you spend on rent do it.

I'm on track for cutting my 30 year mortgage down to 23 years hopefully sooner. Then I will own a home and only have to pay insurance and homesteaded taxes. People who rent a house are paying their LL full mortgage plus a profit, than after 30 years they have nothing to show for it.
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Old 05-23-2018, 12:30 PM
 
139 posts, read 147,028 times
Reputation: 70
Quote:
Originally Posted by Greeniejeans View Post
Between rising interest rates, stagnant wages, and now the Dodd Frank issue...housing will slowly implode again. If you are able to wait it out and buy with cash, you might get a great deal in a year or two.
In some places, housing is out of control but across the rest of the country,
there are few factors though that make a crash still years away.
1. There’s a big resurgence in the economy which is still early IMO.
While the benefits are uneven, large swaths of people are being lifted up.
There’s a lot of cash in the system which still is looking for places to go.
2. People are spreading their money. People from CA moving or investing in Texas or Boise for example.
3. Lot of pent up inflation. While that’s bad in the long run, it means that housing’s higher pricing will seem less out of step and more affordable.
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Old 05-23-2018, 01:16 PM
 
16,485 posts, read 17,501,756 times
Reputation: 23531
Quote:
Originally Posted by BoBromhal View Post
One, I have no doubts that the people who are buying at the top of their budget will have to adjust the budget. Or if the top of their budget is the minimum house, won't be buying. But I would put these Buyers at ~60% of the median house price - it's the low-end Buyer/borrower.

Others may adjust their budget, since a 1% rise in interest rates is about a 12% decrease in $ amount borrowed.

However, one big difference I see - anecdotal evidence, I know - is that today the clients I have are NOT buying anywhere near the top of their budget. So yes, 12 years ago, if the lender said they'd approve you for $400K then by golly folks were spending very close to that. There was a lot more "ride the appreciation wave and upgrade homes every couple of years". Still, the rate of foreclosure for my clients was ZERO in 2009-2013. They just had to wait extra time to sell - which is why average term has gone from 5 years to almost 10 and stayed there.

Today, folks are putting more money down, borrowing well below approval levels (I'd guesstimate 70-80%). So if rates go up and they lose 12% of their purchasing power, they're still within their approval range.

I wonder about the craziness in CA - in the Silicon Valley area. Those folks aren't getting mortgages over $1MM based on ability to repay. They're putting huge amounts of paper worth down.

Given the inventory crisis, simple supply and demand tells me there's no way the lack of inventory is quickly changed. We could lose HALF the Buyers, and inventory would still not be in balance. And a rise in rates could have a greater effect on the Sellers that aren't selling - they will not be able to upgrade homes as much as they assume - a 6% interest is a heckuva lot more expensive than a 3.5% they refinanced to in 2011-2014.
I was approved up to 850,000 amount. I bought at 520,000. With 20% down at 3.45 30 year. My cap was 530,000. Anything above that I didn’t bother looking at it.
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Old 05-23-2018, 02:54 PM
 
10,265 posts, read 6,491,094 times
Reputation: 10837
Quote:
Originally Posted by katskill View Post
In some places, housing is out of control but across the rest of the country,
there are few factors though that make a crash still years away.
1. There’s a big resurgence in the economy which is still early IMO.
While the benefits are uneven, large swaths of people are being lifted up.
There’s a lot of cash in the system which still is looking for places to go.
2. People are spreading their money. People from CA moving or investing in Texas or Boise for example.
3. Lot of pent up inflation. While that’s bad in the long run, it means that housing’s higher pricing will seem less out of step and more affordable.
A lot of areas are up and coming too. i'm in SW Florida and we still have a lot of room to build and improve the economy, when people get tired of Miami and Fort Lauderdale and Palm Beach they will come here.
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Old 05-23-2018, 05:13 PM
 
595 posts, read 375,721 times
Reputation: 1021
Quote:
Originally Posted by BoBromhal View Post
what conclusions do you draw?

I know enough about it that medium-sized banks - generally only located in a region - were required to play by the same rules as the ones who truly created the crisis. It took "too big to fail" and said a $50B bank was big.

And the smaller banks - those under $10B - weren't trading over 5%. they're lending them out.
That's what I got out it also. IMO, repeal, reform or removal doesn't really change anything. Banks are all so inter-connected, one falls, they all fall.

I wonder when Deutsche will.

Came across some very interesting videos by an analyst named Lynnette Zang, blew my mind, very interesting and one smart analyst, IMO. Fact based logic, works for me.
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