New mortgage lending regulations Options

[Spectatrix]

The Fed is going to be proposing some new regulations on mortgage lenders sometime today. I think this is a positive step forward, though I'd also like to see some initiatives for better consumer education (free workshops available for first time home buyers, that sort of thing).

http://money.cnn.com/2007/12/17/real_estat...dex.htm?cnn=yes

[Hartmann]

Restrict use of "liar" loans. The Fed is also expected to restrict the use of so-called "liar loans" or "stated income loans." When lenders make such a loan, they don't verify the income of the potential borrower. The end result: home buyers end up with homes they never could afford in the first place, let alone when their rate resets.

[Spectatrix]

This, on the other hand, I don't like: Fed to lend $20 billion to banks

[impala454]

And all because they handed out loans to people they shouldn't have. Oh well I guess it's better than lending em the 60 billion they asked for. They need to jack the rates on them a year into payback

[GOB]

And all because they handed out loans to people they shouldn't have.

and the people who took out the loans couldn't afford the payments (that they agreed to pay and knew what they were getting into).


just giving the other half of the truth.

[impala454]

I knew someone would point that out.

My point was the irony that the lenders themselves are now in trouble and borrowing money from the govt.

[Spectatrix]

It is ironic. It also makes me mad. We agreed to not regulate mortgage lenders very heavily and let them act on their own. They got themselves into this damn mess and should fall flat on their faces. If we bail them out, will they even learn their lesson?

It's such a perversion of the free market. Let them take their damn lumps and let lenders that *didn't* go all stupid reap the rewards.

This post has been edited by Spectatrix: Dec 20 2007, 09:04 AM

[impala454]

The problem is, if the govt doesn't bail them out the housing market declines even more.

[Spectatrix]

Cool, lower prices for me when I buy a house a year or two from now.

[Hartmann]

Cool, lower prices for me when I buy a house a year or two from now.

Lower prices but potentially higher interest rates.

[impala454]

Cool, lower prices for me when I buy a house a year or two from now.

Haha exactly my thoughts as well, I'll prob be buying another house in the next year or so. With my luck the market will rebound big time just before I buy.

[Spectatrix]

I have good credit and if my boyfriend and I buy a house together, we'd have an assload to put down on the house. Not too terribly worried about interest rates

[Hartmann]

I have good credit and if my boyfriend and I buy a house together, we'd have an assload to put down on the house. Not too terribly worried about interest rates

Hmmm. I'd be interested to hear what the bank says in that situation. I would think they would view you somewhat as a liability, especially if on your own, you can't make the monthly payment.

If you end up doing this, I'd like to hear what kind of rate you get (if you don't mind sharing).

[Spectatrix]

A liability? My boyfriend and I both make good money (he makes a little more, but not by much). He already has a lot saved up for a house since he's been in the job market 2 years longer than me, but I'll have plenty in savings by then as well (my expenses are less than half of my net income). I wouldn't agree to a house that we couldn't easily afford on a single income, especially considering that one or both of us will be going back to school sometime in the next few years.

As for rate, I wouldn't mind sharing, but it'll be at least a year and a half from now. We're going to be renting a place together for a year or two, then if we get married I'm sure we'll buy a place.

But large downpayment + good incomes + good credit + buying far less house than we could potentially afford = good rate. Or so I'd think?

This post has been edited by Spectatrix: Dec 20 2007, 11:29 AM

[Hartmann]

A liability? My boyfriend and I both make good money (he makes a little more, but not by much). He already has a lot saved up for a house since he's been in the job market 2 years longer than me, but I'll have plenty in savings by then as well (my expenses are less than half of my net income). I wouldn't agree to a house that we couldn't easily afford on a single income, especially considering that one or both of us will be going back to school sometime in the next few years.

As for rate, I wouldn't mind sharing, but it'll be at least a year and a half from now. We're going to be renting a place together for a year or two, then if we get married I'm sure we'll buy a place.

But large downpayment + good incomes + good credit + buying far less house than we could potentially afford = good rate. Or so I'd think?

With that information I'd say you're fine. I was just thinking that maybe one of you worked part time or something. If you both have full time jobs and good credit you'll get a good rate. With a big down payment you're set (though, I'd advise a decent down payment with the rest going into a mutual fund or some other investment). If you're budgeted for a certain amount a month, then make the down payment that gets you that, put the rest away.