[Iria]

The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth, raising the possibility of a rise in defaults — the very misfortune that touched off the credit crisis last year.
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Source: MSNBC

[CDsDontBurn]

if you can get a loan, now is the time to buy a house.

[Cow_160483]

lol but so true if you can get the money together, now is the perfect time to go out house hunting you are bound to find a bargain.

[OldBuzzard]

Originally Posted by Iria

The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth, raising the possibility of a rise in defaults — the very misfortune that touched off the credit crisis last year.
________
Source: MSNBC

That's because people with "Champaign Tastes" and a "Beer Budgets" were allowed to buy them.

A good part it of that was because the lenders were FORCED by the government to consider things like WELFARE and FOOD STAMPS as "Income", for loan purposes, and made it almost impossible for them to deny a Housing Loan.

[Tyrsonswood]

On the other side of that, if you own your home outright you couldn't sell it without taking a huge loss. My house is worth half what I paid for it 4 years ago, and that's not because of condition, it's just because of the market. If I had a mortgage on this place, I would be on the streets by now.........

It's just not a "good" time for most people right now .......

Peace,
Tyrsonswood

[Vikingod]

Originally Posted by OldBuzzard

A good part it of that was because the lenders were FORCED by the government to consider things like WELFARE and FOOD STAMPS as "Income", for loan purposes, and made it almost impossible for them to deny a Housing Loan.

I read that article (regarding the Community Reinvestment Act and it's involvement on the sub-prime debacle) and I can say with the utmost confidence, based on my experience in retail lending, bank compliance and commercial lending, that it is a total load of bullshit.

First, foodstamps are not included as income. Second, welfare is income. Third, the real trouble comes from banks not underwriting loans properly, not collecting proof of income (tax returns) and taking the borrowers word as to how much they make, known as stated income ("Yeah, I know I only reported $25k in income in 2006, but I really made $75k!"). Fourth, the portion of CRA loans included within these sub-prime packages is minimal at most and I'm not sure that, given their designation, if they could have even been included in the MBS's. I believe banks are required to maintain and service loans to get CRA credit.

Competitive pressure, greed, terrible risk management practices, hedging to maintain rediculous interest rate spreads related to costs of funds, mark-to-market accounting troubles, non-independent credit rating of overly complex securities, and poor regulator oversight are areas which contributed far more to this problem. Not because banks are required to invest in the communities in which they operate.