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Everyone I know that has recently financed a home has used FHA and it was a struggle for them to come up with the 3.5% down.
Good God! I hope you are exaggerating.
How would you characterize the people you know who bought houses? Middle Class? Poor? 1/%? (I assume not, or we’re in even deeper trouble than we think).
Most of the buyers who offer on my Las Vegas flips are FHA buyers, and they are solidly middle class.
I’ve come to the conclusion that most people in today’s world don’t have a pot to piss in. I’m sure we’ll be hearing that most people aren’t even close to being prepared for retirement. Being 60 years old and only having 60K saved for retirement isn’t going to cut it!
Retirement? What is that? Remember: Retire=Expire!
The one thing FHA should cease is participation in reverse mortgages. In today’s market, a reverse mortgage is the worst lending instrument ever conceived.
So does raising the FHA limit back to $729k make this bailout more likely?
It certainly increases their risk. This change (returning FHA’s loan limit to $730K) is effective immediately too.
What’s the argument here? “You know, the housing market would sure benefit if those households making $200K+ could get FHA financing rather than private market mortgages.”
To me it’s an obvious attempt to make up for the lost move-up market and support prices in the $450K to $750K range in markets like Irvine. It won’t stop prices from falling, and it will increase the FHA losses, but it may help banks offload some more properties at somewhat higher prices.
From the lyrics at the beginning:
“You know that it’s moving too fast
Your out of bounds
Your too late”
I wonder if people will ever learn the difference between “you’re” and “your.”
Here we go:
Your - possessive. “your car, house, etc”
You’re - contraction of you and are. “You are too old for that, etc”
I’ve made that mistake plenty of times, but this one was a cut and paste from a lyrics site.
No grammar for you! Come back, one year!
I always wanted to meet an internet grammar corrector in person. I have a certain vision in my head on what they look like and what their “in-person” personalities are like. I really want to know if it is true.
I’ll only correct grammar in a blog comment, if the author is calling someone else stupid while using horrific grammar. Then it can be fun.
‘Tho, politely pointing out a stranger’s grammar issue in a blog setting would likely be less offensive to the grammar-challenged than persisting in their errors over time and having their bosses and coworkers smirking every time they read the grammar-challengee’s reports and business memos (wouldn’t it??). It’s (the blog-post-from-a-stranger tip) a fairly non-threatening way of getting clued in about something that might be worth some personal research. Just my $0.02 (now removing owlish spectacles and extricating hair from tight bun…)
I think this study is likening IR to an infected diseased parasite who’s spreading his vile disease to otherwise completely healthy homeowners.
Study Examines Impact of Social Networks on Homeowners Decision to Default
RISMedia (11/19/11)
A Mortgage Bankers Association study notes that such factors as home depreciation, the possibility of being underwater for many years and advice from certain influencers have prompted some borrowers to stop paying their home loans. The research examined the reasons that can lead to strategic mortgage default and the role various members of society play in the decision to stop making loan payments. Researchers found that ideas are transmitted through the population in ways similar to those in which diseases are spread and thus can be modeled in a similar fashion. http://rismedia.com/2011-11-19/study-examines-impact-of-social-networks-on-homeowners-decision-to-default/
Full study:
http://bpa.odu.edu/creed/Research/MBA - White Paper - 08072011.pdf
And that is totally different from “healthy home buyers” taking advice from friends at work, local realtors, pals who are mortgage brokers, who talk them into making buying decisions they cannot afford in the first place, shouldn’t have any business buying because they haven’t even a remote idea of banking, finance, debt, what’s happening in the world….please.
How does that article determine that FHA is set to lose $50B total, given that their chart shows FHA to be losing $30B *per quarter*?
Aren’t we talking more like $300B?
Or am I missing something?
No, you aren’t missing anything. Their study has rosy assessments on appreciation resulting in less future losses. Hence, they only believe they will lose $50B when in reality, they will lose much more.
So, it’s kinda like our public employee pensions assuming 8%+ returns for years/decades when most forecasters believe 4%-5% is as reasonably high as you can anticipate?
The first time that I heard about California public pensions getting an 8% guaranteed yield I almost choked.
But it gets much worse. Read about public pension “airtime” payments and benefits:
“Tens of thousands of California state workers are taking advantage of a perk that pays them pension benefits for years they don’t actually work, and reformers looking for places to cut have put it at the top of the list.
State law allows the employees to increase their retirement benefits by tacking up to five fictitious years — known as “air time” — onto their public service.”
California state employees take advantage of airtime pension perk
Don’t believe everything you read about pensions and airtime…
My wife is a teacher and I looked into buying airtime after reading about “what a great deal airtime is to buy.” Without getting into the calculations (but I certainly can if you want), it didn’t make sense to buy it. My wife and I would need to live at least 20 years after she retired to break even on what it would cost to buy the additional 5 years of service time today (and that was using a conservative return figure).
I would rather be able to invest/access that money over the next 25-30 years as opposed to have it locked up in some pension fund that I can’t access and that I may not live to get back (not to mention the political uncertainty surrounding public pension funding generally). No thanks.
WHOA!! This is a fantastic idea, it sound like they’ve thoroughly thought this through..NOTHING can go wrong with this scheme..absolutely NOTHING..
Quote: ” UK Taxpayers will underwrite mortgages totalling hundreds of millions of pounds under plans to ‘‘unblock’’ the housing market and revive Britain’s flagging economy.
The Prime Minister, David Cameron, and his deputy, Nick Clegg, want to help first-time buyers of new homes by carrying part of their mortgage risk. They also propose subsidising the construction of 16,000 homes by giving £400 million ($631 million) of taxpayers’ money to developers”.
Read more:
http://www.smh.com.au/world/cameron-unveils-package-to-stimulate-housing-market-20111121-1nqte.html
Well without the FHA I could not have purchased and I take home some pretty decent money for a man my age. I just today bought a little fixer-upper in Yucca Valley for my full time residence, just outside of the Joshua Tree Nutritional Park. I am 57 years old and tired of renting my little duplex in Oceano with rent going up every month thereabout, and renting in Irvine before. Since this place is in need of a lit of work, right down to new tiles and absetsto removal, I used the HUD 203K loan. I will report back to let you all know how this works out.
Surprised more people don’t talk about this area. It is a little remote and has real snakes but is breathtakingly beautiful country. I will have to fly out of the Palm Springs airport for work now and then until I can complete my helicopter pilot training, which will help with the commute. Great little area. Cheap as Hell. Hot as Hell too!
Maybe because it’s remote, has snakes, and is hot as hell?
Hell, you’re too soft! Snakes pretty much mind to their own. It gets hot, but it snows, too and San Bernardino Mountains are right there. Remoteness is good for when you get tired of Californians. After growing up in Carpinteria and seeing what the gentry did to that area, the desert is the only sane place to live in my book!