Home ownership: For the white and rich

The idea is sound, the execution would be overkill.

Making credit less available drives prices down to where they belong, which has so many consequences.

For one, my current house loses value, so I end up having to sit on it instead of eventually looking at a bigger home. That's not the worse thing in the world, but like it or not, home sales was a big part of the development of our economy and much of that had to do with availability of credit.

But there's a fine line to be walked with that, a line the industry obviously stepped over in a big way.

 

yeah home sales help develop the economy but if people buy what they can't afford (like maxing out credit cards) it doesn't end well.

 

Somebody else mentioned having the same experience earlier. I bought a house that cost about 40 percent less than the most I was approved for. And my wife and I are still challenged to save what we need to save for our retirement, etc. And this was after the housing crash. We bought in 2010. The price point where we bought, I think, should have been near the top of our price range, but it was far from it.

 

15-year mortgage. Hah! Maybe in YOUR part of the world. Not here.

 

There wouldn't be a housing crisis if not for all of the bad loans issued to people who had no business buying houses. The supply was inflated out of whack thanks to all of the cheap loans for everybody with a pulse, many of whom would never be able to pay off the house.
A down payment on a house should be 20 percent or more.

Our Federal government, with ridiculous regulation and threats, and greedy Wall Street folks are equally to blame, with their "derivatives" for this meltdown.

Not everybody deserves a house. There is a reason we have a rental market. The American Dream, like college, should be a reward for those who labor long and hard to achieve it. It shouldn't be like a participation award for your 6-year-old baseball team when you spent the whole season riding the pine.

 

I don't know if it was so much a matter of just people who didn't deserve a loan getting them -- there are still plenty of renters and people living on public assistance who weren't exactly getting home loans -- it's the amount of loan that was being given to people who would reasonably qualify for a loan.

For example, when I was single and making $34k, I should not have been approved for a $150k mortgage (I had about five percent to put down). But I was. I had to discipline myself into buying a $100k house (this is in the south where property values are much less than other parts of the country). Evidently, there were plenty of people who would have taken what they were approved for and maxed it out, then sought a home equity line of credit for an RV. Like I said above, when I bought my second house in 2010, I didn't think it would happen again, but it did. Again, I was approved for about 50 percent more than what I thought was a reasonable amount to spend.

 

I agree.

 

i'm liberal on lots of things, but not this. there has to be more than just some personal responsibility.

first time i investigated getting a mortgage, without ever looking at a property, countrywide told me they'd lend me 750k -- all based on my credit score and what i said i earned (but mostly credit score). No down payment, first and second loans for 80-20.

i knew i couldn't afford that. what i could afford was less than half that, and eventually that's the loan i took. but all this, 'oh, i didn't understand the terms, they lied to me, waaaahh...' -- how is that my fault or responsibility?

 

America's lack of fiscal discipline is readily apparent in all the financial markers, not just the housing market; the budgets, federal, local and state; the credit card market, the personal savings rate. Why the housing market imploded was almost preordained.

 

I don't think that it's necessarily a "liberal" problem. The issue was, at least in part, the unregulated way investment bankers could make a quick buck. That's hardly a liberal issue. To me, it's a good thing to expand home ownership. But expanding home ownership and giving away money in a way gambling on its failure is a completely different issue.