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Mortgage loans and the approval process have NOT been reformed. And now the government has now conspired with the mortgage companies and the next wave of sub-prime borrowers, the later being those who need an $8,000 tax credit to buy property. This conspiracy is even more insideous than the previous.
They'll buy property they can't afford just to get the tax credit, and live off the credit just like the last wave of sub-primers lived of their equity.
Essentially the government is pulling people into the real estate market, many of whom should not be buying because they don't have the financial foundation to satisfy their obligations. This is little more than an extension of the idea that home ownership is a privilege and a right.
So we may see a slight stabilizing effect, maybe even a minor uptick in real estate values. But the bubble won't last long without meaningful wages and jobs.
The mortgage market should have been REFORMED before they threw the tax credit out there to pull unsavory borrowers into the market. Seems most things these days are being done without adequate consideration of the effect.
Anyone remember the old days? When you had to PROVE you could afford the property, when gift letters excluded gifted money from your loan approval ratios, when only a QUALIFIED borrower got a mortgage.
What all of this will cause is another wave of real estate devaluation and the next one will dwarf the previous.
One more example of the gubmint trying to use the US citizen to spur the world economy.
I'm sure you can comb through these forums and find threads full of folks who acknowledge that their finances are truly tight already, but want to buy a home because this credit just calls out to them.
I remember one example of a starving artist in a Cali forum wanting to do just that.
Mortgage loans and the approval process have NOT been reformed. And now the government has now conspired with the mortgage companies and the next wave of sub-prime borrowers, the later being those who need an $8,000 tax credit to buy property. This conspiracy is even more insideous than the previous.
They'll buy property they can't afford just to get the tax credit, and live off the credit just like the last wave of sub-primers lived of their equity.
Essentially the government is pulling people into the real estate market, many of whom should not be buying because they don't have the financial foundation to satisfy their obligations. This is little more than an extension of the idea that home ownership is a privilege and a right.
So we may see a slight stabilizing effect, maybe even a minor uptick in real estate values. But the bubble won't last long without meaningful wages and jobs.
The mortgage market should have been REFORMED before they threw the tax credit out there to pull unsavory borrowers into the market. Seems most things these days are being done without adequate consideration of the effect.
Anyone remember the old days? When you had to PROVE you could afford the property, when gift letters excluded gifted money from your loan approval ratios, when only a QUALIFIED borrower got a mortgage.
What all of this will cause is another wave of real estate devaluation and the next one will dwarf the previous.
Question, have you gone through the home buying process within the last 3 months? Do you know of someone that has gone through the home buying process within the last three months? No it is NOT as easy as it was a year ago to obtain a mortgage.
The $8000 essentially are the funds that the buyers saved up for the downpayment and or prepayment amounts. You HAVE to have the 3% downpayment and prepayment amount in your account BEFORE you are approved for a mortgage.
Also, the banks have tightened up on their home appraisals. Homes are not appraising for the value that many of these owners and realtors believe they should.
The mortgage rules have gotten tighter, one would not know this unless you work in the mortgage or realestate industry or going through or went through the home buying process.
One more example of the gubmint trying to use the US citizen to spur the world economy.
I'm sure you can comb through these forums and find threads full of folks who acknowledge that their finances are truly tight already, but want to buy a home because this credit just calls out to them.
I remember one example of a starving artist in a Cali forum wanting to do just that.
They'll buy property they can't afford just to get the tax credit, and live off the credit just like the last wave of sub-primers lived of their equity.
It's a tax credit. If you buy a house in 2009 you won't see the credit until you file your taxes in 2010. You still have to come up with the full down payment and satisfy the lender that you have the income and stability to carry the mortgage. How is this comparable to a sub-prime loan?
Question, have you gone through the home buying process within the last 3 months? Do you know of someone that has gone through the home buying process within the last three months? No it is NOT as easy as it was a year ago to obtain a mortgage.
The $8000 essentially are the funds that the buyers saved up for the downpayment and or prepayment amounts. You HAVE to have the 3% downpayment and prepayment amount in your account BEFORE you are approved for a mortgage.
Also, the banks have tightened up on their home appraisals. Homes are not appraising for the value that many of these owners and realtors believe they should.
The mortgage rules have gotten tighter, one would not know this unless you work in the mortgage or realestate industry or going through or went through the home buying process.
I call BS. The 8,000 can be written out to a third party. This is being applied as part of the 3% down.
All of this regulation is just talk. No money down is back again just like it was when Fwanks was denying it was a problem.
It's a tax credit. If you buy a house in 2009 you won't see the credit until you file your taxes in 2010. You still have to come up with the full down payment and satisfy the lender that you have the income and stability to carry the mortgage. How is this comparable to a sub-prime loan?
Uh, because the credit increases their disposable income in the year that it hits their 1040. Okay?
I bought a house this summer. The approval process was long and arduous. Mortgage approval processes have become more stringent. I filed for the credit. Because there have been fraudulant claims filed, the IRS is freezing and reviewing most of the claims for this credit. It's taking from 12-16 weeks for the initial processing and can take up to six months before the funds are released.
Question, have you gone through the home buying process within the last 3 months? Do you know of someone that has gone through the home buying process within the last three months? No it is NOT as easy as it was a year ago to obtain a mortgage.
The $8000 essentially are the funds that the buyers saved up for the downpayment and or prepayment amounts. You HAVE to have the 3% downpayment and prepayment amount in your account BEFORE you are approved for a mortgage.
Also, the banks have tightened up on their home appraisals. Homes are not appraising for the value that many of these owners and realtors believe they should.
The mortgage rules have gotten tighter, one would not know this unless you work in the mortgage or realestate industry or going through or went through the home buying process.
I've purchased real estate and refinanced several times through out my life. Make no doubt, the qualification process is like signing up for a library card, not nearly what it was when I bought my first house. And so the policies of today erode the hard work that I've put into acquiring my home by giving loans to loosers who can't pay them back.
Argue all you want but the facts are the facts. Mortgage practices have and are causing continued de-valuation of property.
Used to be you bought a starter home, lived in it, paid your bills, acquired some equity and, in a few years, you moved up. Now they all just want the 3 to 4 thousand sq. ft. house as a matter of right. Go get a job, work hard, apply discipline and maybe you too can have what I have.
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