Comments on: Implode-o-Meter Rolls Out Campaign Against “FHA Subprime” http://www.ritholtz.com/blog/2009/02/implode-o-meter-rolls-out-campaign-against-fha-subprime/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Wed, 15 Feb 2012 00:33:57 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: Mark E Hoffer http://www.ritholtz.com/blog/2009/02/implode-o-meter-rolls-out-campaign-against-fha-subprime/comment-page-1/#comment-148387 Mark E Hoffer Wed, 25 Feb 2009 11:20:58 +0000 http://www.ritholtz.com/blog/?p=20058#comment-148387 if these peeps, the poli-s, cared about 'poor people', they'd look at "Home costs v. Rent"- comparos, and incentivize them Not to make the transaction into HomeOwer-ship.. But, alas... if these peeps, the poli-s, cared about ‘poor people’, they’d look at “Home costs v. Rent”- comparos, and incentivize them Not to make the transaction into HomeOwer-ship..

But, alas…

]]> By: Boomer http://www.ritholtz.com/blog/2009/02/implode-o-meter-rolls-out-campaign-against-fha-subprime/comment-page-1/#comment-148379 Boomer Wed, 25 Feb 2009 06:38:18 +0000 http://www.ritholtz.com/blog/?p=20058#comment-148379 The biggest issue with 100% financing, is that all sorts of games can be played. Valuation in housing is a very messy business and someone with evil intentions can fit the comps to the value in many instances. Also with 100% financing you get the people who are completely impulse buyers with little money to their name. Not exactly the type of people you want to ramrod into a house. If you have seller funded DPA + FHA then the FHA underwriting should be much stricter for that group of people. Much lower debt to income ratios. I think the politicians really believe they are helping poor people get into homes by reducing the amount of money they need to buy. But the fact is these type of loans (IMHO) are the ones that lead to the highest abuse of the poor. The politicians need to sit and learn all the issues involved before moving forward with this bill. If they did understand I think they would defeat it easily. I can only hope and pray that "100% financing" is a deadly enough phrase to kill the bill before it is passed. The biggest issue with 100% financing, is that all sorts of games can be played. Valuation in housing is a very messy business and someone with evil intentions can fit the comps to the value in many instances. Also with 100% financing you get the people who are completely impulse buyers with little money to their name. Not exactly the type of people you want to ramrod into a house.

If you have seller funded DPA + FHA then the FHA underwriting should be much stricter for that group of people. Much lower debt to income ratios.

I think the politicians really believe they are helping poor people get into homes by reducing the amount of money they need to buy. But the fact is these type of loans (IMHO) are the ones that lead to the highest abuse of the poor. The politicians need to sit and learn all the issues involved before moving forward with this bill. If they did understand I think they would defeat it easily. I can only hope and pray that “100% financing” is a deadly enough phrase to kill the bill before it is passed.

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