Mortgage brokers: What's your opinion of the future of US mortgages? (loan, approved)

[aneftp]

Hopefully this housing mess will resolve itself in the next year or two.

But what are your opinions about the future of US mortgages. I know Congress hasn't even began to touch that subject.

As far as I know, I've read up to 60% of US mortgages in 2009 were either VA, FHA, or USDA or some other type of US govt. backed mortgages.

So will the US government eventually back away from these low downpayment programs. I don't think it's sustainable. The taxpayers won't put up with low down payments if we face another crisis and further losses.

Will future mortgages look more like European and Asian mortgages? I know my brother and sister in law had to put 40% downpayment on their 2nd home condo in Malaysia. For a primary home, my Aunt who lives in Rome had to put down 30% downpayment on her apartment. The Chinese are requiring up to 50% down on 2nd homes.

So what's your take?

[ChadMBell]

It's tough to say, but I believe lending will tighten up on mortgages. As you said, look at the mess it has caused. To be frank, I don't get why they're doing 3.5% down still, except that house values are at a low so they hope values will in fact come back this time.

But who knows, maybe in 2 years every loan will be a government backed loan. Making everyone in the mortgage industry a government employee and everyone get's houses for "free".

I think it's interesting how much the fees have gone up on FHA recently, I think that trend will continue. Many people argue that FHA is the best loan program out there and making a ton of money but I'd like to see some numbers on that.

Some of the FHA loans I've been able to do for people, who have a track record of bankruptcies every 7 years and racking up credit card debt, I wouldn't loan them 10 dollars and ever expect to get it back. Yet some how they can get approved for $300,000+ on a home.


There's my rant and 2 cents,

[TimC2462]

Originally Posted by ChadMBell

It's tough to say, but I believe lending will tighten up on mortgages. As you said, look at the mess it has caused. To be frank, I don't get why they're doing 3.5% down still, except that house values are at a low so they hope values will in fact come back this time.

But who knows, maybe in 2 years every loan will be a government backed loan. Making everyone in the mortgage industry a government employee and everyone get's houses for "free".

I think it's interesting how much the fees have gone up on FHA recently, I think that trend will continue. Many people argue that FHA is the best loan program out there and making a ton of money but I'd like to see some numbers on that.

Some of the FHA loans I've been able to do for people, who have a track record of bankruptcies every 7 years and racking up credit card debt, I wouldn't loan them 10 dollars and ever expect to get it back. Yet some how they can get approved for $300,000+ on a home.


There's my rant and 2 cents,

Actually, you're right about the FHA fees being higher. Before shopping for a loan, I did my research on FHA loans but when I met with a mortgage broker that was an affiliate with Wells Fargo, I was a bit surprised to discovere that the conventional loan scenario had lower fees than the FHA loan scenario. You can read more about my experience here: //www.city-data.com/forum/mortg...2106-form.html

[PG2005]

Going through the process myself for the first time, I had no idea how strict lenders would be. I only had heard "oh they tightened up lending" etc etc. That's how I assumed it would be and boy, was I wrong!

I was approved for much more than I know I could actually afford. I thought this isn't the case anymore??

[ChadMBell]

Approvals are based on credit bureau debts only, so it doesn't pain a very accurate picture.

Also lending on FHA can be as high as 55 even 60% DTIs. Which is insanely high considering other expenses that doesn't include (4 kids etc).


It's not stated income, but in some circumstances it might as well be.