Commentary on Conforming Limits Rising…

[GoUSC]

In response to this comment by the head of the NAHB:

“With the potential for an economic recession increasing, now is the time for all of us to put aside our parochial interests and focus on the job of stabilizing the housing market and getting the economy back on track,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif.

****

I emailed him the following. I hope I get some kind of response.

Brian,

I read your comments on conforming loan limits and really am trying to understand the issue at hand. It seems to me that the housing problem is an affordability problem. The market was driven up because of loan’s that threw typical lending standards out the window. If you go back to traditional lending standards than home prices today are not sustainable based on average incomes. How does increasing the GSE conforming loan limits solve this problem? The average person cannot afford a $800,000 home whether the loan rate is 6.5% or 4.5% percent. It would seem to me that to solve the issue at hand you would need home prices to fall further and revert to the mean.

I look forward to your response.

Sincerely,

Mark R.

ps.

For reference:

$800,000 home
Assume 10% down ($80,000)
30 year @ 6.5% = $4,550 PMT
30 year @ 4.5% = $3,648

Even at 4.5% interest you are talking a $45k debt service. Based on conservative lending standard of 30-35% of Gross Income you are talking yearly income of around $145,000. Well above the mean.

[cr]

I read an article in the LA Times today on CA political morons calling for legislation to prevent sub-prime borrowers from facing foreclosure.

I love it – these people shouldn’t be in homes they can’t afford, lied about the money they make, didn’t read loan docs, or refied and lived lavishly and we want to make sure they stay in their homes thereby artificially propping up inflated values, with no regard to future generations who will want to someday buy.

One suggestion was to give 120 days notice on interest rate and payments there were to reset.

Hmmmm…you bought a house with a 3 Year Fixed ADJUSTABLE RATE MORTGAGE. Isn’t 13,140 days enough notice?

These people never cease to amaze me.

For those who wonder when the bottom will come, it will be when idiots like these realize that prices are inflated way too high, that THAT is the problem with our economy, that access to more debt is not a solution, and that a 50% price drop is a return to NORMAL levels.

Until then they will exascerbate the problem with “solutions” like these.

[bob007]

before we blame politicians for pandering to the lowlife
let us look at ourself

there are a lot of piggingtoners who want home prices to fall because they want to buy one. they could care less if prices soared after they bought.

[drunkle]

i like how you condescended an industry person by doing the math for him… and yet your email had some glaring grammatical errors… assuming you cut and paste your email text.

i wouldn’t hold my breath for a response…

[drunkle]

i like how you condescended an industry person by doing the math for him… and yet your email had some glaring grammatical errors… assuming you cut and paste your email text.

i wouldn’t hold my breath for a response…

[drunkle]

i like how you condescended an industry person by doing the math for him… and yet your email had some glaring grammatical errors… assuming you cut and paste your email text.

i wouldn’t hold my breath for a response…

[drunkle]

i like how you condescended an industry person by doing the math for him… and yet your email had some glaring grammatical errors… assuming you cut and paste your email text.

i wouldn’t hold my breath for a response…

[drunkle]

i like how you condescended an industry person by doing the math for him… and yet your email had some glaring grammatical errors… assuming you cut and paste your email text.

i wouldn’t hold my breath for a response…

[bob007]

before we blame politicians for pandering to the lowlife
let us look at ourself

there are a lot of piggingtoners who want home prices to fall because they want to buy one. they could care less if prices soared after they bought.

[bob007]

before we blame politicians for pandering to the lowlife
let us look at ourself

there are a lot of piggingtoners who want home prices to fall because they want to buy one. they could care less if prices soared after they bought.

[bob007]

before we blame politicians for pandering to the lowlife
let us look at ourself

there are a lot of piggingtoners who want home prices to fall because they want to buy one. they could care less if prices soared after they bought.

[bob007]

before we blame politicians for pandering to the lowlife
let us look at ourself

there are a lot of piggingtoners who want home prices to fall because they want to buy one. they could care less if prices soared after they bought.

[cr]

I read an article in the LA Times today on CA political morons calling for legislation to prevent sub-prime borrowers from facing foreclosure.

I love it – these people shouldn’t be in homes they can’t afford, lied about the money they make, didn’t read loan docs, or refied and lived lavishly and we want to make sure they stay in their homes thereby artificially propping up inflated values, with no regard to future generations who will want to someday buy.

One suggestion was to give 120 days notice on interest rate and payments there were to reset.

Hmmmm…you bought a house with a 3 Year Fixed ADJUSTABLE RATE MORTGAGE. Isn’t 13,140 days enough notice?

These people never cease to amaze me.

For those who wonder when the bottom will come, it will be when idiots like these realize that prices are inflated way too high, that THAT is the problem with our economy, that access to more debt is not a solution, and that a 50% price drop is a return to NORMAL levels.

Until then they will exascerbate the problem with “solutions” like these.

[cr]

I read an article in the LA Times today on CA political morons calling for legislation to prevent sub-prime borrowers from facing foreclosure.

I love it – these people shouldn’t be in homes they can’t afford, lied about the money they make, didn’t read loan docs, or refied and lived lavishly and we want to make sure they stay in their homes thereby artificially propping up inflated values, with no regard to future generations who will want to someday buy.

One suggestion was to give 120 days notice on interest rate and payments there were to reset.

Hmmmm…you bought a house with a 3 Year Fixed ADJUSTABLE RATE MORTGAGE. Isn’t 13,140 days enough notice?

These people never cease to amaze me.

For those who wonder when the bottom will come, it will be when idiots like these realize that prices are inflated way too high, that THAT is the problem with our economy, that access to more debt is not a solution, and that a 50% price drop is a return to NORMAL levels.

Until then they will exascerbate the problem with “solutions” like these.

[cr]

I read an article in the LA Times today on CA political morons calling for legislation to prevent sub-prime borrowers from facing foreclosure.

I love it – these people shouldn’t be in homes they can’t afford, lied about the money they make, didn’t read loan docs, or refied and lived lavishly and we want to make sure they stay in their homes thereby artificially propping up inflated values, with no regard to future generations who will want to someday buy.

One suggestion was to give 120 days notice on interest rate and payments there were to reset.

Hmmmm…you bought a house with a 3 Year Fixed ADJUSTABLE RATE MORTGAGE. Isn’t 13,140 days enough notice?

These people never cease to amaze me.

For those who wonder when the bottom will come, it will be when idiots like these realize that prices are inflated way too high, that THAT is the problem with our economy, that access to more debt is not a solution, and that a 50% price drop is a return to NORMAL levels.

Until then they will exascerbate the problem with “solutions” like these.

[cr]

I read an article in the LA Times today on CA political morons calling for legislation to prevent sub-prime borrowers from facing foreclosure.

I love it – these people shouldn’t be in homes they can’t afford, lied about the money they make, didn’t read loan docs, or refied and lived lavishly and we want to make sure they stay in their homes thereby artificially propping up inflated values, with no regard to future generations who will want to someday buy.

One suggestion was to give 120 days notice on interest rate and payments there were to reset.

Hmmmm…you bought a house with a 3 Year Fixed ADJUSTABLE RATE MORTGAGE. Isn’t 13,140 days enough notice?

These people never cease to amaze me.

For those who wonder when the bottom will come, it will be when idiots like these realize that prices are inflated way too high, that THAT is the problem with our economy, that access to more debt is not a solution, and that a 50% price drop is a return to NORMAL levels.

Until then they will exascerbate the problem with “solutions” like these.

[Author]

Posts