Posted on 06/12/2015 7:06:41 AM PDT by SeekAndFind
In a dangerous deja vu, politicians and lobbyists are pressuring banks to throw open their lending windows for credit-poor people who want to buy homes but may not be able to afford them.
Worried about sagging homeownership rates, especially among minorities, the Obama administration seeks to boost homebuying by easing mortgage lending standards — and affordable-housing zealots are egging it on. So are Realtors and brokers hungry for profits.
They're all cheering recent moves by Obama regulators to slash down-payment and mortgage insurance requirements for first-time homebuyers at federal agencies that back such mortgages.
They also support a plan to substitute the traditional credit-scoring system that virtually all mortgage lenders use with one that would help qualify tens of millions of immigrants with spotty or no credit histories at all.
While housing is key to driving economic growth, degrading the two most important predictors of default in home loans — down payments and credit scores — is no way to rev it up.
The last housing boom was built on a bubble fueled by poorly underwritten loans. Fomenting artificial demand for homes among buyers who aren't ready to take on such debt will only create another bubble and devastating bust.
Obama officials dance around this concern by arguing that the pendulum has swung too far the other way. "A few years ago, it was too easy to get a loan," HUD chief Julian Castro said earlier this month. "Now it's too hard."
National Realtors sing a similar refrain, complaining that potential homebuyers face "excessively strict" lending requirements. But that's a myth. Data show that many first-time buyers with low FICO scores and little money down are buying homes every month.
(Excerpt) Read more at news.investors.com ...
The definition of Insanity.
Here we go again...the RATS throwing money on bad loans which the taxpayer will have to bail out AGAIN!!!
It is all about BUYING RAT VOTES at taxpayer expense...
The definition of insanity is doing the same thing over and over looking for a _different result_.
What if your goal actually was to repeat the previous result?
All over the internet you can find photos and video of boarded up, abandoned homes in virtually all Rust Belt cities. If young and low-income people want a home, an urban homesteading program which allows them to acquire one of these houses for very little money, fix it up, live in it, and revitalize those neighborhoods, makes infinitely more sense.
I think it’s more than buying votes.
It’s about taking down the American economic system.
You misspelled Malevolence.
‘zackly.
Bingo.
That pendulum swings back and forth between too easy and too difficult constantly. Hope it stabilizes soon.
It will. A broken pendulum lying on the floor is very stable.
See if you can figure out who made this speech:
THE PRESIDENT: “Good morning. Owning a home lies at the heart of the American dream. A home is a foundation for families and a source of stability for communities. It serves as the foundation of many Americans’ financial security. Yet today, while nearly three-quarters of all white Americans own their homes, less than half of all African Americans and Hispanic Americans are homeowners. We must begin to close this homeownership gap by dismantling the barriers that prevent minorities from owning a piece of the American dream.”
“The single greatest hurdle to first time homeownership is a high down payment requirement that can put a home out of reach. So my administration is proposing the American Dream Down Payment Fund. When a low-income family is qualified to buy a home, but comes up short on the down payment, the American Dream Down Payment Fund will help provide the needed funds. We estimate that this fund will open the door to homeownership for 40,000 low-income families annually.”
“A second obstacle to minority homeownership is a lack of affordable housing. To encourage the production of single-family homes for sale in neighborhoods where affordable housing is scarce, my administration is proposing a single-family affordable housing credit. Over the next five years, this will provide developers nearly $2.4 billion in tax credits for building affordable single-family housing in distressed areas. These credits will make 200,000 new homes available over its first five years to low-income purchasers.”
“A third major obstacle to minority homeownership is the complexity and difficulty of the purchasing process. So we’re stepping up our efforts to better educate first-time home buyers. Consumers need to know their rights and responsibilities as home buyers. Education is the best protection for families against abusive and unscrupulous lenders. Financial education and housing counseling can help protect home buyers against abuses, greatly improve the loan terms they are offered, and help families get through tough times with their homes intact.”
“Through these important initiatives, we can help thousands of American families live the kinds of lives they had once only dreamed about. But government action isn’t enough. We need to energize and engage the private sector, as well. That is why I have challenged the real estate industry leaders to join with the government, with non-profit organizations, and with private sector financial institutions in a major nationwide effort to increase minority homeownership.”
“My approach to broadening homeownership focuses on empowering people to help themselves, and to help one another. These important initiatives will accomplish their purpose because Americans, working together and taking responsibility for one another, will make this great country even greater.”
“The strength of America lies in the honor and the character and goodwill of its people. When we tap into that strength, we discover there is no problem that cannot be solved in this wonderful land of liberty.”
http://www.thechristiansolution.com/doc2010/322_AmericanDream.html
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