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g5jamz

Those that ignore history are doomed to repeat it

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g5jamz    1,111

and ignorant...

http://www.washingtonpost.com/business/economy/obama-administration-pushes-banks-to-make-home-loans-to-people-with-weaker-credit/2013/04/02/a8b4370c-9aef-11e2-a941-a19bce7af755_story.html?hpid=z1

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default

Really Obama?

Defaultless loans?

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Niner National    535

:sigh:

I'm young, I bought a house without issue. Even got a 100% loan with no PMI because my credit score was so good and my salary was high enough.

The only young people being left behind are those that probably shouldn't own a house right now anyway.

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BBQ&Beer    716

Depends on what they mean by "weaker".

Having said that, I think this would require more oversight than its worth. I checked what kind of loan I could get just before the crash, & the guy tells me that with VA, my credit, & $50K a year, he would throw $450K my way. Bat poo crazy.

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thatlookseasy    607

Now if only we could bundle a bunch of these loans together into derivatives then convince the credit agencies to give them a AAA rating, we could sell these things all over the place and eliminate the risk

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dos poptarts    692

NINJA loans making a stealthy comback:

"all that is required to qualify for a mortgage loan is qualifying for a life insurance policy, a down payment that usually amounts to 10% of the purchase price and verification that the borrower has the financial ability to pay the monthly payments."

http://finance.yahoo.com/news/fastfunds-financial-corporation-acquires-exclusive-130000087.html

Subprime loans for autos.

As the economy has slowly improved, lenders are increasingly comfortable writing auto loans for those with subprime or weak credit ratings. In the fourth quarter, there was a 30.9 percent increase in the number of new vehicles sold to those with deep subprime credit scores under 550. Loans to those with subprime credit scores between 550 and 619 jumped 11.5 percent.

...

Still, 43.2 percent of new car loans in the fourth quarter were written for those with subprime credit scores, according to Experian. That is the highest percentage of new car loans going to subprime buyers since late 2007.

http://www.cnbc.com/id/100522157?par=yahoo

All that was old is new again....

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thefuzz    4,119

Simply Stunning.

Sometimes I can't believe what I am hearing when people talk about our federal government.

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Gazi    3,805

As long as we don't have to bail them out I don't really care.

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thefuzz    4,119

As long as we don't have to bail them out I don't really care.

You won't get to make that call, and of course we would be bailing them out. Have you learned nothing about this country in the last 7 years?

I say this is all fine and good, as long as the banks hold the paper that they loan, and like you said, no bailouts possible.

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g5jamz    1,111

LOL...if we don't bail them out...it would lead to the next depression. Remember those words during the end of the Bush administration with the TARP and other bailouts?

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Niner National    535

Depends on what they mean by "weaker".

Having said that, I think this would require more oversight than its worth. I checked what kind of loan I could get just before the crash, & the guy tells me that with VA, my credit, & $50K a year, he would throw $450K my way. Bat poo crazy.

LOL. Unreal.

I didn't even ask how much I COULD get because I knew how much I could easily afford and I didn't want to go beyond that.

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BBQ&Beer    716

LOL. Unreal.

I didn't even ask how much I COULD get because I knew how much I could easily afford and I didn't want to go beyond that.

Exactly. Sad thing is when I balked he tried to talk me into it. Sadder still is that there were probably a fair number of young guys recently out of the military that fell for it.

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Gazi    3,805

Exactly. Sad thing is when I balked he tried to talk me into it. Sadder still is that there were probably a fair number of young guys recently out of the military that fell for it.

I ended up buying a home for around 300k using my VA loan and those good times when no one gave a fug back in 2004. Good thing another soldier ended up buying it from me 2 years later when I retired and I got to keep my VA eligibility. If it was anywhere else except military dependent area I probably would have been screwed

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Davidson Deac II    4,204

As long as we don't have to bail them out I don't really care.

Problem is that there might be no way to avoid bailing them out. The FDIC is on the hook for deposits, and If a large bank or a bunch of small banks fail, then they start running out of money real fast. So either the feds give them more money, or we start seeing a bank run that would make the great depression look like child's play.

One of the reasons that the fed stepped and brokered deals with Chase and Wells Fargo when Washington Mutual failed and Wachovia was on the brink of failing is that the FDIC was already about out of money, and had either of those institutions went under completely, the FDIC was going to need an emergency infusion of cash to cover deposits. That is also why the Tarp was the right move, because the feds might have had to pay out more thru the FDIC than they did thru the Tarp, and all the Tarp that went to the banks was paid back with interest. The FDIC money might never have been recovered.

Supposedly, the government has better procedures to deal with such an event now, but the only way to know for certain is if it actually happens.

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cookinwithgas    7,375

The banks, from what I've seen, tightened up way too much post crash - they do need to loosen up the money to get things rolling. This does involve risk like anything else. However we know that people seem to be more aware of financial planning post recession, and of course G5's position, which is incorrect, is that "the government forced banks to make bad loans" which has been shown to be false over and over again right here, which explains why he still wants to insinuate that it's "Obamas fault".

What G5 of course didn't want to put in the quotes as it would make it less scary:

Administration officials say they are looking only to allay unnecessary hesi­ta­tion among banks and encourage safe lending to borrowers who have the financial wherewithal to pay.

“There’s always a tension that you have to take seriously between providing clarity and rules of the road and not giving any opportunity to restart the kind of irresponsible lending that we saw in the mid-2000s,” said a senior administration official who was not authorized to speak on the record.

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