Who are the buyers in this market and economy?

[SDEngineer]

[quote=peterb]Every “investment” is speculation. Unless you can predict the future, it’s a gamble.
The one exception being Goldman Sachs, of course. Mainly because they can write the future as needed.[/quote]

This may be objectively true, but it’s specious.

The fact is that if a real estate investment cash flows as a rental, it’s FAR less of a gamble than if the investment fails to cash flow and the basis of the investment is solely to capture appreciation.

[sdduuuude]

I’d say the people I know who are buying are:
– people who sold a house elsewhere and moved here.
– people with families in condos that they own who have run out of space and can’t remodel.
– first-time buyers sick of renting.

[sdduuuude]

I’d say the people I know who are buying are:
– people who sold a house elsewhere and moved here.
– people with families in condos that they own who have run out of space and can’t remodel.
– first-time buyers sick of renting.

[sdduuuude]

I’d say the people I know who are buying are:
– people who sold a house elsewhere and moved here.
– people with families in condos that they own who have run out of space and can’t remodel.
– first-time buyers sick of renting.

[sdduuuude]

I’d say the people I know who are buying are:
– people who sold a house elsewhere and moved here.
– people with families in condos that they own who have run out of space and can’t remodel.
– first-time buyers sick of renting.

[sdduuuude]

I’d say the people I know who are buying are:
– people who sold a house elsewhere and moved here.
– people with families in condos that they own who have run out of space and can’t remodel.
– first-time buyers sick of renting.

[Arraya]

They also fail to mention that the FHA’s mortgage insurance is more costly (and can handle a higher default rate WITHOUT passing that on to taxpayers) and that the FHA historically “cures” defaulted loans at a higher rate than the banks.

http://www.bostonherald.com/business/general/view/2009_05_11_Home_loan_quagmire:_Rep_warns_another_U_S__agency_may_need_big_bailout/srvc=home&position=also
Rep warns another U.S. agency may need big bailout

Bad debt at the Federal Housing Administration could send the nation’s already wobbly economy into yet another tailspin, U.S. Rep. Stephen Lynch told the Herald in an interview late last week.

“Problems at the FHA could upset the little recovery that we now have,” said Lynch, who is drafting legislation that would require the sprawling government agency to provide Congress with a financial status report twice a year.

“Right now, we can’t tell where they are at,” he said.

Currently, the FHA, which guarantees payments of millions of home loans, reports its financial status to Congress once a year in the fall.

Due to recent upheaval in the mortgage market, the FHA’s share of home loans has ballooned to about 30 percent.

[Arraya]

They also fail to mention that the FHA’s mortgage insurance is more costly (and can handle a higher default rate WITHOUT passing that on to taxpayers) and that the FHA historically “cures” defaulted loans at a higher rate than the banks.

http://www.bostonherald.com/business/general/view/2009_05_11_Home_loan_quagmire:_Rep_warns_another_U_S__agency_may_need_big_bailout/srvc=home&position=also
Rep warns another U.S. agency may need big bailout

Bad debt at the Federal Housing Administration could send the nation’s already wobbly economy into yet another tailspin, U.S. Rep. Stephen Lynch told the Herald in an interview late last week.

“Problems at the FHA could upset the little recovery that we now have,” said Lynch, who is drafting legislation that would require the sprawling government agency to provide Congress with a financial status report twice a year.

“Right now, we can’t tell where they are at,” he said.

Currently, the FHA, which guarantees payments of millions of home loans, reports its financial status to Congress once a year in the fall.

Due to recent upheaval in the mortgage market, the FHA’s share of home loans has ballooned to about 30 percent.

[Arraya]

They also fail to mention that the FHA’s mortgage insurance is more costly (and can handle a higher default rate WITHOUT passing that on to taxpayers) and that the FHA historically “cures” defaulted loans at a higher rate than the banks.

http://www.bostonherald.com/business/general/view/2009_05_11_Home_loan_quagmire:_Rep_warns_another_U_S__agency_may_need_big_bailout/srvc=home&position=also
Rep warns another U.S. agency may need big bailout

Bad debt at the Federal Housing Administration could send the nation’s already wobbly economy into yet another tailspin, U.S. Rep. Stephen Lynch told the Herald in an interview late last week.

“Problems at the FHA could upset the little recovery that we now have,” said Lynch, who is drafting legislation that would require the sprawling government agency to provide Congress with a financial status report twice a year.

“Right now, we can’t tell where they are at,” he said.

Currently, the FHA, which guarantees payments of millions of home loans, reports its financial status to Congress once a year in the fall.

Due to recent upheaval in the mortgage market, the FHA’s share of home loans has ballooned to about 30 percent.

[Arraya]

They also fail to mention that the FHA’s mortgage insurance is more costly (and can handle a higher default rate WITHOUT passing that on to taxpayers) and that the FHA historically “cures” defaulted loans at a higher rate than the banks.

http://www.bostonherald.com/business/general/view/2009_05_11_Home_loan_quagmire:_Rep_warns_another_U_S__agency_may_need_big_bailout/srvc=home&position=also
Rep warns another U.S. agency may need big bailout

Bad debt at the Federal Housing Administration could send the nation’s already wobbly economy into yet another tailspin, U.S. Rep. Stephen Lynch told the Herald in an interview late last week.

“Problems at the FHA could upset the little recovery that we now have,” said Lynch, who is drafting legislation that would require the sprawling government agency to provide Congress with a financial status report twice a year.

“Right now, we can’t tell where they are at,” he said.

Currently, the FHA, which guarantees payments of millions of home loans, reports its financial status to Congress once a year in the fall.

Due to recent upheaval in the mortgage market, the FHA’s share of home loans has ballooned to about 30 percent.

[Arraya]

They also fail to mention that the FHA’s mortgage insurance is more costly (and can handle a higher default rate WITHOUT passing that on to taxpayers) and that the FHA historically “cures” defaulted loans at a higher rate than the banks.

http://www.bostonherald.com/business/general/view/2009_05_11_Home_loan_quagmire:_Rep_warns_another_U_S__agency_may_need_big_bailout/srvc=home&position=also
Rep warns another U.S. agency may need big bailout

Bad debt at the Federal Housing Administration could send the nation’s already wobbly economy into yet another tailspin, U.S. Rep. Stephen Lynch told the Herald in an interview late last week.

“Problems at the FHA could upset the little recovery that we now have,” said Lynch, who is drafting legislation that would require the sprawling government agency to provide Congress with a financial status report twice a year.

“Right now, we can’t tell where they are at,” he said.

Currently, the FHA, which guarantees payments of millions of home loans, reports its financial status to Congress once a year in the fall.

Due to recent upheaval in the mortgage market, the FHA’s share of home loans has ballooned to about 30 percent.

[SDEngineer]

[quote=Arraya]They also fail to mention that the FHA’s mortgage insurance is more costly (and can handle a higher default rate WITHOUT passing that on to taxpayers) and that the FHA historically “cures” defaulted loans at a higher rate than the banks.

http://www.bostonherald.com/business/general/view/2009_05_11_Home_loan_quagmire:_Rep_warns_another_U_S__agency_may_need_big_bailout/srvc=home&position=also
Rep warns another U.S. agency may need big bailout

[/quote]

None of which addresses the fact that the loans that are going heavily bad on the FHA side are the 0 down (through seller funded DPA) loans to folks with sub 620 scores – which simply aren’t available any longer. As far as I can tell, this is a problem that has already been solved by both eliminating the seller funded DPA and requiring a minimum standard of creditworthiness.

Given the changes, I expect the FHA to return to historical norms for it’s performance (especially considering that the requirements in place now are tougher requirements than have been historically needed on it).

[SDEngineer]

[quote=Arraya]They also fail to mention that the FHA’s mortgage insurance is more costly (and can handle a higher default rate WITHOUT passing that on to taxpayers) and that the FHA historically “cures” defaulted loans at a higher rate than the banks.

http://www.bostonherald.com/business/general/view/2009_05_11_Home_loan_quagmire:_Rep_warns_another_U_S__agency_may_need_big_bailout/srvc=home&position=also
Rep warns another U.S. agency may need big bailout

[/quote]

None of which addresses the fact that the loans that are going heavily bad on the FHA side are the 0 down (through seller funded DPA) loans to folks with sub 620 scores – which simply aren’t available any longer. As far as I can tell, this is a problem that has already been solved by both eliminating the seller funded DPA and requiring a minimum standard of creditworthiness.

Given the changes, I expect the FHA to return to historical norms for it’s performance (especially considering that the requirements in place now are tougher requirements than have been historically needed on it).

[SDEngineer]

[quote=Arraya]They also fail to mention that the FHA’s mortgage insurance is more costly (and can handle a higher default rate WITHOUT passing that on to taxpayers) and that the FHA historically “cures” defaulted loans at a higher rate than the banks.

http://www.bostonherald.com/business/general/view/2009_05_11_Home_loan_quagmire:_Rep_warns_another_U_S__agency_may_need_big_bailout/srvc=home&position=also
Rep warns another U.S. agency may need big bailout

[/quote]

None of which addresses the fact that the loans that are going heavily bad on the FHA side are the 0 down (through seller funded DPA) loans to folks with sub 620 scores – which simply aren’t available any longer. As far as I can tell, this is a problem that has already been solved by both eliminating the seller funded DPA and requiring a minimum standard of creditworthiness.

Given the changes, I expect the FHA to return to historical norms for it’s performance (especially considering that the requirements in place now are tougher requirements than have been historically needed on it).

[SDEngineer]

[quote=Arraya]They also fail to mention that the FHA’s mortgage insurance is more costly (and can handle a higher default rate WITHOUT passing that on to taxpayers) and that the FHA historically “cures” defaulted loans at a higher rate than the banks.

http://www.bostonherald.com/business/general/view/2009_05_11_Home_loan_quagmire:_Rep_warns_another_U_S__agency_may_need_big_bailout/srvc=home&position=also
Rep warns another U.S. agency may need big bailout

[/quote]

None of which addresses the fact that the loans that are going heavily bad on the FHA side are the 0 down (through seller funded DPA) loans to folks with sub 620 scores – which simply aren’t available any longer. As far as I can tell, this is a problem that has already been solved by both eliminating the seller funded DPA and requiring a minimum standard of creditworthiness.

Given the changes, I expect the FHA to return to historical norms for it’s performance (especially considering that the requirements in place now are tougher requirements than have been historically needed on it).

[Author]

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