Getting harder to qualify for mortgage loans…

[(former)FormerSanDiegan]

[quote=jameswenn][quote=beanmaestro]I have to admit, I don’t really follow the logic in these limits. Our expenses break down more or less as follows (well, before we bought a house)

25% taxes
35% savings
15% rent
25% other expenses

Other than not being stupid enough to grossly overpay for a house, I don’t see why we couldn’t spend 50%+ of our gross income on a house.[/quote]

If you use that break down, once you go to 50% (35% savings + 15% rent) for a home payment, you don’t have any savings, i think 35% for housing is a safer number[/quote]

But you forgot taxes. Your taxes will be reduced in that scenario, so it might be more like …

20 % taxes
10% savings
50% Housing
25% other expenses

Though I would not advocate spending that much on housing.

[patientrenter]

[quote=patb]I suspect that the banks aren’t writing new mortgages
unless they are just darned sure they are
going to get paid off.[/quote]

Banks are only making loans that they can re-sell to the govt (FHA, FNM, etc). The govt is buying without regard to responsible minimum downpayments etc., and is making virtually unlimited amounts available.

In other words, what banks are doing now has nothing to do with the risks – the risks are being dumped on future taxpayers.

[patientrenter]

[quote=patb]I suspect that the banks aren’t writing new mortgages
unless they are just darned sure they are
going to get paid off.[/quote]

Banks are only making loans that they can re-sell to the govt (FHA, FNM, etc). The govt is buying without regard to responsible minimum downpayments etc., and is making virtually unlimited amounts available.

In other words, what banks are doing now has nothing to do with the risks – the risks are being dumped on future taxpayers.

[patientrenter]

[quote=patb]I suspect that the banks aren’t writing new mortgages
unless they are just darned sure they are
going to get paid off.[/quote]

Banks are only making loans that they can re-sell to the govt (FHA, FNM, etc). The govt is buying without regard to responsible minimum downpayments etc., and is making virtually unlimited amounts available.

In other words, what banks are doing now has nothing to do with the risks – the risks are being dumped on future taxpayers.

[patientrenter]

[quote=patb]I suspect that the banks aren’t writing new mortgages
unless they are just darned sure they are
going to get paid off.[/quote]

Banks are only making loans that they can re-sell to the govt (FHA, FNM, etc). The govt is buying without regard to responsible minimum downpayments etc., and is making virtually unlimited amounts available.

In other words, what banks are doing now has nothing to do with the risks – the risks are being dumped on future taxpayers.

[patientrenter]

[quote=patb]I suspect that the banks aren’t writing new mortgages
unless they are just darned sure they are
going to get paid off.[/quote]

Banks are only making loans that they can re-sell to the govt (FHA, FNM, etc). The govt is buying without regard to responsible minimum downpayments etc., and is making virtually unlimited amounts available.

In other words, what banks are doing now has nothing to do with the risks – the risks are being dumped on future taxpayers.

[patientrenter]

[quote=HLS]In a society where the govt encourages spending if it took 20% down and 30% debt ratios to qualify for a mortgage, you would see home prices much, much lower, but that just wouldn’t be good for an artificial, phony economy. Don’t expect to see it anytime soon.[/quote]

Too true. The problem is so obvious, yet the PTB refuse to stop. Your solution would remove the punch completely and get everyone to face reality sober, but they just crank up the music and add some new flavors of intoxication to keep the party going, way after it stopped making any sense or being any fun.

This slight pullback in the FHA spigot is only being considered. If it would lead to any appreciable reduction in crazy loans, it will be repealed. The goal is to keep home prices high, no matter what.

[patientrenter]

[quote=HLS]In a society where the govt encourages spending if it took 20% down and 30% debt ratios to qualify for a mortgage, you would see home prices much, much lower, but that just wouldn’t be good for an artificial, phony economy. Don’t expect to see it anytime soon.[/quote]

Too true. The problem is so obvious, yet the PTB refuse to stop. Your solution would remove the punch completely and get everyone to face reality sober, but they just crank up the music and add some new flavors of intoxication to keep the party going, way after it stopped making any sense or being any fun.

This slight pullback in the FHA spigot is only being considered. If it would lead to any appreciable reduction in crazy loans, it will be repealed. The goal is to keep home prices high, no matter what.

[patientrenter]

[quote=HLS]In a society where the govt encourages spending if it took 20% down and 30% debt ratios to qualify for a mortgage, you would see home prices much, much lower, but that just wouldn’t be good for an artificial, phony economy. Don’t expect to see it anytime soon.[/quote]

Too true. The problem is so obvious, yet the PTB refuse to stop. Your solution would remove the punch completely and get everyone to face reality sober, but they just crank up the music and add some new flavors of intoxication to keep the party going, way after it stopped making any sense or being any fun.

This slight pullback in the FHA spigot is only being considered. If it would lead to any appreciable reduction in crazy loans, it will be repealed. The goal is to keep home prices high, no matter what.

[patientrenter]

[quote=HLS]In a society where the govt encourages spending if it took 20% down and 30% debt ratios to qualify for a mortgage, you would see home prices much, much lower, but that just wouldn’t be good for an artificial, phony economy. Don’t expect to see it anytime soon.[/quote]

Too true. The problem is so obvious, yet the PTB refuse to stop. Your solution would remove the punch completely and get everyone to face reality sober, but they just crank up the music and add some new flavors of intoxication to keep the party going, way after it stopped making any sense or being any fun.

This slight pullback in the FHA spigot is only being considered. If it would lead to any appreciable reduction in crazy loans, it will be repealed. The goal is to keep home prices high, no matter what.

[patientrenter]

[quote=HLS]In a society where the govt encourages spending if it took 20% down and 30% debt ratios to qualify for a mortgage, you would see home prices much, much lower, but that just wouldn’t be good for an artificial, phony economy. Don’t expect to see it anytime soon.[/quote]

Too true. The problem is so obvious, yet the PTB refuse to stop. Your solution would remove the punch completely and get everyone to face reality sober, but they just crank up the music and add some new flavors of intoxication to keep the party going, way after it stopped making any sense or being any fun.

This slight pullback in the FHA spigot is only being considered. If it would lead to any appreciable reduction in crazy loans, it will be repealed. The goal is to keep home prices high, no matter what.

[HLS]

A statement was issued recently that even if current administration attempts of modifications are successful, there are still 3 to 6 million foreclosures expected in the next few years, and 300-500 banks could fail.

Logically, there is nothing they can do to stop it. The “Deed for Lease” program from FNMA to rent back to those who deed their property back is just another feeble hope of slowing the train wreck.

Rewarding people who made poor choices by allowing them to stay in house that they cannot afford is irresponsible.

Billions upon billions of dollars has disappeared in perceived wealth, never to be seen again, yet so many people continue to spend like they did 5 years ago…so many people are still in denial about what could happen in the next 5-10 years.

The govt will continue to spread false hope that it’s improving because just imagine what will happen if they don’t….

[HLS]

A statement was issued recently that even if current administration attempts of modifications are successful, there are still 3 to 6 million foreclosures expected in the next few years, and 300-500 banks could fail.

Logically, there is nothing they can do to stop it. The “Deed for Lease” program from FNMA to rent back to those who deed their property back is just another feeble hope of slowing the train wreck.

Rewarding people who made poor choices by allowing them to stay in house that they cannot afford is irresponsible.

Billions upon billions of dollars has disappeared in perceived wealth, never to be seen again, yet so many people continue to spend like they did 5 years ago…so many people are still in denial about what could happen in the next 5-10 years.

The govt will continue to spread false hope that it’s improving because just imagine what will happen if they don’t….

[HLS]

A statement was issued recently that even if current administration attempts of modifications are successful, there are still 3 to 6 million foreclosures expected in the next few years, and 300-500 banks could fail.

Logically, there is nothing they can do to stop it. The “Deed for Lease” program from FNMA to rent back to those who deed their property back is just another feeble hope of slowing the train wreck.

Rewarding people who made poor choices by allowing them to stay in house that they cannot afford is irresponsible.

Billions upon billions of dollars has disappeared in perceived wealth, never to be seen again, yet so many people continue to spend like they did 5 years ago…so many people are still in denial about what could happen in the next 5-10 years.

The govt will continue to spread false hope that it’s improving because just imagine what will happen if they don’t….

[HLS]

A statement was issued recently that even if current administration attempts of modifications are successful, there are still 3 to 6 million foreclosures expected in the next few years, and 300-500 banks could fail.

Logically, there is nothing they can do to stop it. The “Deed for Lease” program from FNMA to rent back to those who deed their property back is just another feeble hope of slowing the train wreck.

Rewarding people who made poor choices by allowing them to stay in house that they cannot afford is irresponsible.

Billions upon billions of dollars has disappeared in perceived wealth, never to be seen again, yet so many people continue to spend like they did 5 years ago…so many people are still in denial about what could happen in the next 5-10 years.

The govt will continue to spread false hope that it’s improving because just imagine what will happen if they don’t….

[Author]

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