Property Value/Appraisals RANT

[Loren49]

Yes and Obama and the Democrats are trying to start it all over again. They think it will 'help the economy'. It's what got us here in the first place.

Will Obama's new lending rules make it harder to get a mortgage? - The Week
I

n a move that may radically change the housing market, the federal Consumer Financial Protection Bureau on Thursday unveiled new rules designed to essentially ban the kinds of high-risk loans that contributed to the housing bubble and the devastating crash that followed. Lenders will be barred from offering deceptive teaser rates that can lure borrowers into loans they can't afford. Banks will also have to verify homebuyers' ability to keep up with their mortgage payments. The aim of the sweeping rules, says Edward Wyatt at The New York Times, is to prevent a recurrence of the "unbridled frenzy" in lending that occurred when banks could rush to issue mortgages and then resell them, making a bundle regardless of whether the loans were ever repaid. Plus, with clear rules in place, banks will be protected against complaints of abusive lending, creating, in theory, a win-win for lenders and borrowers.

The government is essentially doing nothing more than requiring a little common sense and caution from everybody, says Danielle Douglas at The Washington Post. Of course, there's a catch. The "ability-to-pay" rules, which take effect next January, will make it harder for some people to get help realizing the American dream of owning a home.
........................

This source indicates the standards have been tightened. This thread contaions a number of examples of those who had difficulty getting loan. What specifically has been done in the past four years to encourage another bubble? The appropriate level of requirements for a loan is a tough call. How many on this board would throw in $50,000 or whatever amount on a real estate loan for 90% of appraised value. What percent would make you invest your own money?

Loren

 

[sdkubota]

Did everyone forget the housing bubble a few years ago that has caused the problems associated with this post. The Banks would lend money to anyone basically. The appraisers had no problem stating that the property was worth more than it should have been. As the homeowner bought they never tried to negotiate the asking price down. They didn't need too, the bank would give them the loan no matter what. They were going to sell the paper anyway. That made the property values in the local selling area more "valuable". That caused a feeding frenzy for the property values.
In my opinion the remodel price is too high. In my area a remodel like yours would be about $40 per square foot. Including the bathroom fixtures and permits. My house "1875 sq. ft." was built for $80 per square foot. This was in 2006.

The government, led by the democrat party, demanded banks lend to NINJA borrowers. No income, no job, and no accountability. Instead of trying to revise history remember it accurately and place blame where due.

 

[Loren49]

I would really rather not have this thread turn into a political debate which we all know is against moderator rules. Let's just leave the politcal slas out of the discussion and comtinue with ideas or possible experiences that would assist with the topic of this post. There is plenty of mud that can be tossed in many directions on the bubble problem but it is clearly poitical. We can do better. I would prefer that political comments be flagged and if the content is introduced by the same person a number of times, there should be a consequence.

First political comment in thread was post #15, then again in #45,#136,#138,#141,#160,#178. I responded to #178 which was the second time the current president was slammed. So I did not introduce but I did comment. Let's just leave the specific trashing out of the conversation and it will be better.

On a positive note, almost all of the 182 posts on this thread have stayed on topic without reverting to political jabs.:thumbsup: There is a forum for the politics and many of us aren't interested in going there.

Loren

 

[riptides]

It's a catch 22.

Banks lend money, well they want too.

The housing market has tanked. Your going to have to come up with money to either come to the table with, your improve your loan to value.

 

[ultrarunner]

Did everyone forget the housing bubble a few years ago that has caused the problems associated with this post. The Banks would lend money to anyone basically. The appraisers had no problem stating that the property was worth more than it should have been. As the homeowner bought they never tried to negotiate the asking price down. They didn't need too, the bank would give them the loan no matter what. They were going to sell the paper anyway. That made the property values in the local selling area more "valuable". That caused a feeding frenzy for the property values.
In my opinion the remodel price is too high. In my area a remodel like yours would be about $40 per square foot. Including the bathroom fixtures and permits. My house "1875 sq. ft." was built for $80 per square foot. This was in 2006.

Nope, I sure didn't forget and again the innocent are tarred with those that are not so innocent.

Thought the entire mortgage market went crazy. I couldn't pick up the phone without someone trying to loan me money.

I also think not enough credit has been given to those that stayed the course, honored their commitments and didn't surrender their property or their morals during the meltdown.

I know way to many that opted for strategic defaults. In other words, they had the capacity to honor their commitments and CHOOSE to bail... this goes for lawyers, accountants and even doctors in addition to the Joe down the street.

A simple return to at least 20% down would have stopped much of this nonsense...

The new rules still permit small down payments under the programs.

I onced offered to buy a home from an estate with 25% down... I got to know the principals and the home needed work. They offered to carry with 10% down.

It was a win/win. I was able to buy the property and they had set up a superior income stream.

Seven years in I let them know I was going to pay off the balance. They offered to lower the rate if I didn't. So now I pay 4% with 6 years to go.

 

[MossflowerWoods]

Nope, I sure didn't forget and again the innocent are tarred with those that are not so innocent.

Thought the entire mortgage market went crazy. I couldn't pick up the phone without someone trying to loan me money.

I also think not enough credit has been given to those that stayed the course, honored their commitments and didn't surrender their property or their morals during the meltdown.

I know way to many that opted for strategic defaults. In other words, they had the capacity to honor their commitments and CHOOSE to bail... this goes for lawyers, accountants and even doctors in addition to the Joe down the street.

Amazingly well said.
I agree 1000%

David

 

[MossflowerWoods]

I would really rather not have this thread turn into a political debate...

As the OP, I too would like this to stay out of politics.

But the guilty parties who created this fiasco are well know, and should not be free on their own recognizance...

David

 

[murphy1244]

As the OP, I too would like this to stay out of politics.

But the guilty parties who created this fiasco are well know, and should not be free on their own recognizance...

David

The people had a little to do with it too, you think.

 

[two_bit_score]

The people had a little to do with it too, you think.

They just drank what was before them.

 

[murphy1244]

They just drank what was before them.

They could of passed. I did