Horror Story

[peterb]

It’s kind of funny, but I was talking to a couple of friends who’ve never had much money and always wanted a house. Now that there’s 3% down and a much higher limit, they both are going to buy a house. When I told them of the horrible fundementals, they both said, “At 3% down, if the crap hits the fan, we just stay in it until they evict us.”

So here’s the future speaking. I give them 18 months, tops.

[Diego Mamani]

[quote=IONEGARM]I dont have a huge problem with 3.5% down as a buyer as long as its full doc and there is something significant coming from the buyers side. That prevents a lot of the games from being played. [/quote]

With all due respect… I do have a huge problem with tiny (i.e., less than 5%) down payments. These buyers will be underwater in no time, especially if the down payment money was a “gift” and closing costs were paid buy the seller.

We need a real, market-driven economy, not a make believe, commie-style fantasy where govt institutions make decisions instead of private parties.

[Diego Mamani]

[quote=IONEGARM]I dont have a huge problem with 3.5% down as a buyer as long as its full doc and there is something significant coming from the buyers side. That prevents a lot of the games from being played. [/quote]

With all due respect… I do have a huge problem with tiny (i.e., less than 5%) down payments. These buyers will be underwater in no time, especially if the down payment money was a “gift” and closing costs were paid buy the seller.

We need a real, market-driven economy, not a make believe, commie-style fantasy where govt institutions make decisions instead of private parties.

[Diego Mamani]

[quote=IONEGARM]I dont have a huge problem with 3.5% down as a buyer as long as its full doc and there is something significant coming from the buyers side. That prevents a lot of the games from being played. [/quote]

With all due respect… I do have a huge problem with tiny (i.e., less than 5%) down payments. These buyers will be underwater in no time, especially if the down payment money was a “gift” and closing costs were paid buy the seller.

We need a real, market-driven economy, not a make believe, commie-style fantasy where govt institutions make decisions instead of private parties.

[Diego Mamani]

[quote=IONEGARM]I dont have a huge problem with 3.5% down as a buyer as long as its full doc and there is something significant coming from the buyers side. That prevents a lot of the games from being played. [/quote]

With all due respect… I do have a huge problem with tiny (i.e., less than 5%) down payments. These buyers will be underwater in no time, especially if the down payment money was a “gift” and closing costs were paid buy the seller.

We need a real, market-driven economy, not a make believe, commie-style fantasy where govt institutions make decisions instead of private parties.

[Diego Mamani]

[quote=IONEGARM]I dont have a huge problem with 3.5% down as a buyer as long as its full doc and there is something significant coming from the buyers side. That prevents a lot of the games from being played. [/quote]

With all due respect… I do have a huge problem with tiny (i.e., less than 5%) down payments. These buyers will be underwater in no time, especially if the down payment money was a “gift” and closing costs were paid buy the seller.

We need a real, market-driven economy, not a make believe, commie-style fantasy where govt institutions make decisions instead of private parties.

[SD Realtor]

Peter I know man… sad but true… I have heard alot of stories like that.

Diego… yes fraud is running rampant. It seems pretty darn easy to “create” a relative, gift the downpayment money and presto the buyer gets the home.

I cannot tell you what percentage of people commit fraud but it would not surprise me at all if it is higher then ever.

I wouldn’t even raise an eyebrow if the government soon just becomes a direct lender. Isn’t that the next logical step?

[SD Realtor]

Peter I know man… sad but true… I have heard alot of stories like that.

Diego… yes fraud is running rampant. It seems pretty darn easy to “create” a relative, gift the downpayment money and presto the buyer gets the home.

I cannot tell you what percentage of people commit fraud but it would not surprise me at all if it is higher then ever.

I wouldn’t even raise an eyebrow if the government soon just becomes a direct lender. Isn’t that the next logical step?

[SD Realtor]

Peter I know man… sad but true… I have heard alot of stories like that.

Diego… yes fraud is running rampant. It seems pretty darn easy to “create” a relative, gift the downpayment money and presto the buyer gets the home.

I cannot tell you what percentage of people commit fraud but it would not surprise me at all if it is higher then ever.

I wouldn’t even raise an eyebrow if the government soon just becomes a direct lender. Isn’t that the next logical step?

[SD Realtor]

Peter I know man… sad but true… I have heard alot of stories like that.

Diego… yes fraud is running rampant. It seems pretty darn easy to “create” a relative, gift the downpayment money and presto the buyer gets the home.

I cannot tell you what percentage of people commit fraud but it would not surprise me at all if it is higher then ever.

I wouldn’t even raise an eyebrow if the government soon just becomes a direct lender. Isn’t that the next logical step?

[SD Realtor]

Peter I know man… sad but true… I have heard alot of stories like that.

Diego… yes fraud is running rampant. It seems pretty darn easy to “create” a relative, gift the downpayment money and presto the buyer gets the home.

I cannot tell you what percentage of people commit fraud but it would not surprise me at all if it is higher then ever.

I wouldn’t even raise an eyebrow if the government soon just becomes a direct lender. Isn’t that the next logical step?

[IONEGARM]

[quote=Diego Mamani][quote=IONEGARM]I dont have a huge problem with 3.5% down as a buyer as long as its full doc and there is something significant coming from the buyers side. That prevents a lot of the games from being played. [/quote]

With all due respect… I do have a huge problem with tiny (i.e., less than 5%) down payments. These buyers will be underwater in no time, especially if the down payment money was a “gift” and closing costs were paid buy the seller.

We need a real, market-driven economy, not a make believe, commie-style fantasy where govt institutions make decisions instead of private parties.
[/quote]

The biggest issue I have with 3.5% down (as long as it comes from the buyers side) is valuation of the property. Valuation isn’t the laser pinpoint accuracy that loan underwriting makes them out to be. There is a wide range. The lower the down the more conservative the appraisal should be. FHA is implementing dual appraisals for some things now, I like that idea.

But full doc undwritten income isn’t a fantasy economy. I have more of a problem with the 31% front end ratio than 3.5% down with a conservative appraisal.

[IONEGARM]

[quote=Diego Mamani][quote=IONEGARM]I dont have a huge problem with 3.5% down as a buyer as long as its full doc and there is something significant coming from the buyers side. That prevents a lot of the games from being played. [/quote]

With all due respect… I do have a huge problem with tiny (i.e., less than 5%) down payments. These buyers will be underwater in no time, especially if the down payment money was a “gift” and closing costs were paid buy the seller.

We need a real, market-driven economy, not a make believe, commie-style fantasy where govt institutions make decisions instead of private parties.
[/quote]

The biggest issue I have with 3.5% down (as long as it comes from the buyers side) is valuation of the property. Valuation isn’t the laser pinpoint accuracy that loan underwriting makes them out to be. There is a wide range. The lower the down the more conservative the appraisal should be. FHA is implementing dual appraisals for some things now, I like that idea.

But full doc undwritten income isn’t a fantasy economy. I have more of a problem with the 31% front end ratio than 3.5% down with a conservative appraisal.

[IONEGARM]

[quote=Diego Mamani][quote=IONEGARM]I dont have a huge problem with 3.5% down as a buyer as long as its full doc and there is something significant coming from the buyers side. That prevents a lot of the games from being played. [/quote]

With all due respect… I do have a huge problem with tiny (i.e., less than 5%) down payments. These buyers will be underwater in no time, especially if the down payment money was a “gift” and closing costs were paid buy the seller.

We need a real, market-driven economy, not a make believe, commie-style fantasy where govt institutions make decisions instead of private parties.
[/quote]

The biggest issue I have with 3.5% down (as long as it comes from the buyers side) is valuation of the property. Valuation isn’t the laser pinpoint accuracy that loan underwriting makes them out to be. There is a wide range. The lower the down the more conservative the appraisal should be. FHA is implementing dual appraisals for some things now, I like that idea.

But full doc undwritten income isn’t a fantasy economy. I have more of a problem with the 31% front end ratio than 3.5% down with a conservative appraisal.

[IONEGARM]

[quote=Diego Mamani][quote=IONEGARM]I dont have a huge problem with 3.5% down as a buyer as long as its full doc and there is something significant coming from the buyers side. That prevents a lot of the games from being played. [/quote]

With all due respect… I do have a huge problem with tiny (i.e., less than 5%) down payments. These buyers will be underwater in no time, especially if the down payment money was a “gift” and closing costs were paid buy the seller.

We need a real, market-driven economy, not a make believe, commie-style fantasy where govt institutions make decisions instead of private parties.
[/quote]

The biggest issue I have with 3.5% down (as long as it comes from the buyers side) is valuation of the property. Valuation isn’t the laser pinpoint accuracy that loan underwriting makes them out to be. There is a wide range. The lower the down the more conservative the appraisal should be. FHA is implementing dual appraisals for some things now, I like that idea.

But full doc undwritten income isn’t a fantasy economy. I have more of a problem with the 31% front end ratio than 3.5% down with a conservative appraisal.

[Author]

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