Prior to all the crazy lending, service members and former members had access to VA loans. We didn't have to put down 20% and we paid no PMI.
I'd bet that if someone could gather the figures, the default rate on VA loans has been lower than average. It isn't the loan vehicle that matters as much as the character of the people you're loaning the money to.
“I’d bet that if someone could gather the figures, the default rate on VA loans has been lower than average. It isn’t the loan vehicle that matters as much as the character of the people you’re loaning the money to. “
It’s both. There are very few people that have enough character to be a slave to a bank for the next 20+ years, which is what millions of people are looking at now in California, Florida, Nevada, Arizona, and some other places. These are people that might make $100k, but are being hit with $400k loans that have ‘adjusted’ to the point where their payments are $5,000 per month - and there is no option to sell the house, since it’s worth, maybe half of the loan value.
No sane person would spend most of his adult life under those conditions, especially if it meant things like depriving their kids of a chance to go to college. Then again, no financially intelligent person would take a loan with terms like that. But then again, no respectable bank would ever make a loan like that. But then again, no reasonable credit rating agency would ever call that loan AAA. But then again, no respectable Wall Street brokerage house would ever buy that loan to package it into a financial instrument. But then again no well-run pension or retirement plan would ever buy a financial instrument with those kinds of loans in them. But then again, no intelligent government would ever insure the loan....
Amazing how many checks we had in the system, and they all failed...and yet no one goes to jail.