ONE THING EXPERIENCE TEACHES US IS THAT, JUST BECAUSE A PERSON IN AUTHORITY SAYS SOMETHING, DOESN'T MAKE IT TRUE.
EXAMPLE: HUD Secretary Donovan, in announcing the details of the changes to FHA financing, states:
"The new policies are designed to strengthen the FHA's capital reserves so we can continue to fulfill our mission of serving underserved communities."
The changes include:
1. Assuming HUD/FHA employs actuaries, the actuaries had to know that, due to increased MIP payouts, the FHA insurance fund was approaching a dangerous level and the MIP needed to be increased. Why did the request for an increase in MIP wait until the fund was in default??? If the MIP had been brought up to where it was before being reduced to 2.25% or 2.75%, the fund could have been replenished over the past year or two without going into default.
IN 1990, THE UPFRONT MIP WAS, I believe 3.8%.
"o If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP."
By shifting the upfront MIP (which can be financed) to annual MIP, which adds to each monthly mortgage payment, more home buyers will be disqualified.
Mr. Donovan states further that: "In addition, we were determined that these changes should support, not disrupt, the nation's housing market recovery."
2. It defies logic that proposals to increase the cash needed by home buyers can do anything but disrupt the nation's housing market recovery by reducing the pool of qualified home buyers with money to close. Higher closing cost will = fewer buyers.
3. It doesn't take a Rhodes Scholar to understand that reducing seller concessions from up to 6% to up to $3%, will reduce the buying pool. For every $100,000 in purchase price, the buyer's cash needs for closing may, depending on the area, increase by 1%. Further, HUD/FHA is, I believe, infringing on the home seller's right to use their assets as they please. How the seller uses their equity is, IMO, none of the government's business. If a buyer requests more than a seller is willing to pay, the real estate industry has a simple process, accept, counter or reject. The appraisal process is the logical check on inflated value to fund closing cost assistance.
4. Lender enforcement. I am interested in lender comments about proposals for lender enforcement.
Mr. Donovan writes: "by continuing to provide affordable, responsible mortgage products, FHA will support the housing market's recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities."
The new higher cash requirements will simply drive prospective home buyers out of the market. Or, make them further reliant on community/county/state programs funded by HUD/FHA designed to provide tax money to further grow government or funnel tax money to politically connected groups.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.
"Honey, can't we at least look at homes for sale, our apartment is just to small and expensive".
"Why Dear?? Our lender said the new FHA rules mean we need several $Thousand more to buy".
The bureaucrats really don't understand. What is they say? Those who can do, those who can't make policy!
Need a REALTOR at the helm to get things ship shape, squared away Lenn. Many times the top of a government agency are headed by a great politician that helped our leader get elected but not always the best well versed guy for the job. Those are our leaders and bigger federal government is scary.
Gary. Indeed. We had an understanding of Mr. Donovan's FHA knowledge when he stated that the tax credit could be used for down payments. HA! When I heard that last summer, my question was, "Who's going to write the give letter?"
Lenn, I'll never understand HUD or for that matter most government agencies...If they tell us this will be a good program for us, don't they think we'll check on that claim?
Steve. No, they do not. They believe that we're like sheep, or lemmings.
Andrew. You're right on target.
Lenn....when the government thinks we're taking a step forward, they make damn sure we end up taking two or three backwards.....it never fails....FHA was working for many.....now it will work for "not many".....
Lenn,
Being an actual real estate practitioner, like you, the logic here is flawless. What we all see in the trenches is a significant number of people who have decent credit scores, but not a lot of cash. Increasing the amount they need to bring to the table, and at the same time reducing the amount they can get as a credit, will have profound effects on the industry. Government officials stating otherwise notwithstanding.
Rich
It is ludricrous to think that anytime the government steps in that anything will be easier or smarter. I cannot understand what they are doing over there. And, Rich, I'm seeing people with cash and damaged credit scores....just the ticket for a contract for deed.
Barbara. I believe that you are "spot on".
Rich. Indeed, we see it every day. The simple elimination of "seller down payment assistant" programs took many good buyers out of the market.
Don. I have absolutely no doubt about "what's going on over there". But, then, everyone knows I'm paranoid.
Another great post!!! May be you should send this to Washington Post. With the low inventory and multiple contracts its already stressfull for a buyer to win a contract. Include all the new regulation that will lower buyers purchasing power or put them out of buyer pool! We don't want speculatives again to hoard all the homes and go thru another mess.
It seems like Donovan is just part of an administration who really doesn't want the economy to improve.
Great post Lenn. A majority of my business is with 1st time homebuyers and these changes will definately take more than a few out of the market. A number of lenders are pushing USDA loans. Anyone want to take a guess at the future default rate of these?
Lenn -
President Obama sounds like a leader. Unfortunately, many of his appointees (and a lot George's Bush's) are not up to the task.
That this guy says these obviously incorrect and inconsistent things proves he is among those.
There is so much that goes on behind closed doors. Which is much different that what they say.
They tell us what they think we want to hear.
Their GOAL: Keep the middle class in economy slavery.
You've really hit the nail on the head with this post. Once again, the Government, in their effort to "tweak" the process, is creating some unintended consequences that will ultimately hamper the recovery within the housing markets. God help us all.
Hi Lenn,
Thanks for the timely information. It seems like there's a lot of disqualification going on these days. Since this is ultimately a political issue... I'll leave it at that. Cheers.
Andrew. Disqualification is the right word. What they haven't admitted is their motive.
Tom. YOU hit the nail on the head.
Mark. You are smarter than the average bear.
Jim. He clearly needs to walk in my shoes for a year, or yours.
Tricia. My recollection is that the USDA loan has a very low rate of default. Any loan that is fully documented will usually have low default rates. I expect that the USDA will be the next target for government help.
Larry. BINGO!
Ritu. In my area, consumers have a hard time competing with investor buyers. The hoops that consumers need to jump, leaves them quite non-competitive.
Lenn,
It does say something about the mindset. Maybe the fact that they don't really have a real estate person advising them? I mean how could they think that restricting the availability of funds would help??
Larry. I really take great offence with the matter of limiting a seller's contribution. It is their own money. There are other ways to determine value. If the prices are inflated to pay closing costs, that's not gong to fool a good appraiser.
Of course HUD, with HVCC, is trying to kill off the good appraisers too.
In reading Donovan's "introduction" to the PY2010 budget summarywhen he said they were planning MORE money in Sec. 8 rentals I found it to be a "excuse" so HUD can't be blamed for future foreclosures. If they don't make loans, they can't go bad. It is criminal in my mind to suggest people should take government money to rent as opposed to continuing to help buyers.
Tammy. This needs to be a post.
Yes, I have long believed that HUD and the administration has a plan to reduce the percentage of home ownership in this country dramatically through destriction of the wealth of the middle class wealth and subsidize tenancy.
Sooner or later, we'll probably see new adventures in public housing.
The new FHA guidelines are another squeeze on the potential homebuyers. Tighter money, and soon rising interest rates on the horizon. Just wait and see.
Dick and Dixie. Indeed. We know it's coming.
Thanks for the encouragement Lenn, now it is one.
Lenn - I'm afraid the "tampering" is only beginning. When politicians see problems they are often quick to develop "solutions," most of which have serious unintended consequences (HVCC for example). It would be nice if those involved had actual experience in the areas they're regulating.
John. Read Tammy's post with the HUD budget introduction.
It makes it clear that their mandate is social engeering, not doing their job.
So many changes going on with HUD. I heard the buyer also has to put 10% down if his/her credit is below 580. These changes will surely reduce the number of buyers able to purchase a home.
Lenn the only change that I see having much of an impact is the second one reducing "seller concessions to three percent, from six percent". I don't see much of an impact by raising the MIP to 2.25%, except on refinances. And as far as downpayments going up, that is only for those with credit scores below 580. The reason that will have very little effect is because just about every lender is requiring credit scores of 620 or higher on FHA loans because their investors will not purchase FHA loans with credit scores below that.
So while these changes may seem significant they really are not. The bigger impact is going to be felt by the Condo approval changes that FHA is making. Doing away with the Spot Approval, establishing a consentration limit, and exsisting approved Condo's to be re-certified will have a major impact on the Condo Market.
Lenn
Washington really doesn't understand the housing market. They don't respond they react (late).
Good luck and success.
Lou Ludwig
Reminds me of an old saying " I'm from the government and I am here to help you". That can certainly be said about Cuomo and Donovan, They are both just garden variety Pols with social agendas to get populist votes.
Patricia. I would suggest to HUD that a credit score is not as important as the overall buyer profile. We have had several home buyer who were more than able to pay their mortgage payment with family income, but low credit scores because they have not been in the employment market place long enough to establish credit. I still see HUD's new guidelines as "throwing a few babies out with the bath water". Loan officer training and monitoring is sorely needed. In many areas, anyone can be a loan officer without training, licensing, basic knowledge. It's basically a sales position, not a financial position. I get calls daily from loan officers who have no experience whatsoever.
George. Spot on. The rise in MIP will not hurt the real estate industry. The reduction in seller assist will kill off many worthy home buyers. That is so very basic that I can only conclude that the intent of that guideline was intentional.
Lou. Thanks. However, I would say that Washington, due to their lack of understanding of the real estate industry, overreacts.
Tom. You are brilliant. Thanks.
We agree...looking at the whole buyer picture is what is important and adding more $$$'s to the formula is not making things better for inventory reduction, first time buyers, etc., etc.,
We agree...looking at the whole buyer picture is what is important and adding more $$$'s to the formula is not making things better for inventory reduction, first time buyers, etc., etc.,
Sally & David. The matter of the $$$$$ is simple math.
I've gone far beyond that. I'm looking at the motivation of government interference in the home buying process that clearly will shrink the buyer pool and buyer opportunity.
It simply defies logic.
Mind boggling. We struggle daily to help fix the housing market, against all odds I might add. I would like to know that the banking industry and the government are really behind us, not where they are now.
Andrea. Of course they're behind us, like a bulldozer pushing us over the cliff.
The sad truth is that all the lenders are skittish about the housing market and trying to reduce risk. Unfortunately that reduces home buying and leads to possibly a worse market. Kind of like a self fulfilling prophecy.
Gabe. I'm not aware that lenders had any problem with up to 6% closing contribution from sellers.
This is an aboration of HUD and can only be explained as an attempt to limit accessibility of housing to qualified persons.
What I want to know is "why".
Next thing you know, the government will ban retail sales or discounting for shoes and boats and hats. Prices will no longer be fungible and subject to the market place.
Pretty soon the government will want to price anything and everything for sale.
I don't buy the tired old excuse that buyers add the closing help to the price thereby invlading the market. We have appraisals and if the value isn't there, let the appraisers on the ground say so, not the government who hasn't been there, isn't there now and will likely never be there.
That act like resale real estate properties have a fixed "retail" price like shoes or autos. Nonsense. These are used homes and they are subject to "reasonable market value" determinations between the buyer and the seller.
It's what's known as "the market". Or, better, "the free market".
Clearly, our regulators are so far removed with regard to being out of touch with the market that it is almost comical now. I have been in the Mortgage Banking industry for a little less than 15 years, with the all the new changes, regulations and such it is painfully obvious that all our regulators have done is further suppress any potential recovery that may have happened in a natural course. Between HVCC, which is an utter train wreck, the new RESPA rules which will succesfully eliminate Mortgage Brokers, and now this, we will only further decline in home sales which will only further hurt the economy. I do not know what they are thinking but the concept should be pretty simple here. Real Estate and related industries account for a large part of the wealth and prosperity of the country, if you continue to suppress it, things will not get any better and we will continue to see high unemployment, which will further lead to decline in value through higher default rates. What we need more than anything is make sense leadership from people who actually have a clue. Only cure at this point can be that all regulators, congress and a like be immediately terminated and replaced. Of course that will never happen so we are stuck with all the political grand standing at the cost and expense of the American Public. How about we make prudent changes that actually make sense? Maybe a tiered system of lending to reward the prudent home buyers of today who have done the proper things to be able to take advantage of the low priced market. Its simple realy:
720-850 FICO - with 3 months reserves, MIP should be kept same, LTV should be same as today, seller consesions should remain same
680-720 FICO - Adjust MIP by .25 basis points, same LTV as today, Same seller consesions
640-680 FICO - Adjust MIP by .50 basis points, adjust annual MIP by .125-.25 depending on how bad the deficit is, same LTV as today, same seller consesions
620-640 FICO - Adjust MIP by .75 basis points, adjust annual MIP by .25-.50, LTV should be max 95% with same seller consesions as today, or keep LTV same but lower seller consesions to 3%. The end result is the same eigther way, duh!
Below a 620 FICO - Minimum of 10% down- (which really defeats the entire purpose of FHA, as well as destroys the whole reason the FHA was created) but hey you have to please the political nimwits who realy are the ones to blame for this mess anyway. Seller consesions remain same, MIP adusted by .75 basis points, annual MIP can be adjusted by .75% as well to allow performing assets to buld reserve in the fund over time.
There is much more that can be said, however I will not go there because this comment will end up being 3 pages long of ranting and raving. Good luck to us all, and KEEP FIGHTING THE GOOD FIGHT.
Heaven forbid buyers do a good thing like try to plan and SAVE for a home purchase. As agents we always claim we have the best interest of our buyers at heart. Is it such a bad thing that buyers are being forced to save and set aside money for their purchase? Or are we just looking at the dent it will put in our pockets (which would look like serving self first instead of our clients) if the home buying process was set back a bit while buyers bump up their savings?
Hmmmm! Savings - I've always viewed that as a good thing. Now it's considered a novel approach instead of the development of a good habit? For the most part, the government is implementing "feel good" laws just so that can say they are doing their part. And for the most part, they have done far more damage than good by creating such feel good laws. But this is just one that I happen to agree with. Buyers should relax their dependency on others to make their dreams come true. And they shouldn't be prepared to give up their dream home because they failed to consider that they might just need to carry more of the financial weight in the purchase.
Guess I'm the outcast here, but I've been there before
You expressed it perfectly when you said it defies logic. It is discouraging to think that they are so clueless, but have the power to impose their rules; or they know exactly what they are doing and have ulterior motives that serve no one but government. Either way, it will only hurt the recovery of the housing market and deserving buyers. It is maddening!
I totally disagree, you should see my post regarding how this can be leveraged
I've always said we're beter off when our government does the least to 'help' us. Now, more people are starting to understand what I mean.
Steve and Tina. You are so right. The actions of the government to supress the housing industry shows a woeful lack of basic understanding of our economy. They, like far to many in power, believe that the stock market or Wall Street is the economy. The American consumer is the economy and they are breaking the back of the American consumer.
Ms. Cadenhead. That cynical statement, "Or are we just looking at the dent it will put in our pockets" is an implication that real estate agents have no cognizence of the economy of this country, are too ignorant of anything but our own pocketbook to have an opinion about the government that affects every citizen in this country.
When the time comes that a real estate agent or broker has to quietly observe the government's actions that affect our country, we'll be far removed from any degree of free speech that we enjoy and in which I indulge daily.
You have insulted every practicing real estate agent or broker in this country.
Until you have taken a vow of poverty and donate your services to home buyers and sellers, your opinion that agents make decisions based only on their pocketbook is demeaning to us all.
Nice post Lenn, to your question about the lender opinons of the lender restrictions: It's good.
PMI companies give better PMI programs to banks that have strong track records. Agency lenders absolutely give different price tiers to stronger lenders. As a lender, I like it. As a taxpayer, I'd insist on it.
Steve & Tina on #40 saved me some time....glad I read to the bottom before typing. Agree with you almost in full except for one part: It should be a slide, not a staircase.
They only make those grids for us because they think we're not smart enough to handle formulas. Something like: Base UFMIP +/- FICO layer +/- Reserves layer +/- DTI layer.
The current crop of politicians and political appointees in Washington seems to feel they can run every industry better. They do seem to have the ability to see the whole systemic impact of their policies and are more interested in their own agenda. Instead of solving problems they are making the current situation worse.
Lenn, this is a great example of how they are getting in the way of the recovery, not helping it.
Thanks for sharing!
Dana. Indeed, and when actions defy logic, I look for motives of the perpetrator of that action.
Joetta. I have always believed in a market economy for the real estate industry. The more government meddles, the worse it gets.
Chris. Thanks. Shucks, I learned to qualify FHA buyers with the arcane formula in place in the 1970s and 1980s before we could even pull credit reports. Things have changed but basic truths like "a fully documented loan for a qualified buyer" is less likely to default. The DPA and seller assist are details which, when manipulated by government, simply increase or decrease the buyer pool. At that point, I want to know the motive of such interference.
I've been mulling over these proposed changes with my favorite lender. Just when the home-buyer "ball" gets rolling again, leave it to the government to throw a wrench in the works. I completey agree with you Lenn. What business is it what the sellers do with their equity? I also agree with George that the proposed condo re-certification will eliminate several condo communities in my area that need first-time homebuyers. If this goes into play, how long will it take to get this certification? I'm sure quick responses from these condo associations will be the norm- NOT! Is anyone at NAR working on these issues for us? Hello...
Hmmm...I am not versed enough in the particulars to comment on the first point, about the MIP requirements, but the reduction of seller concessions is a bit alarming, Lenn. It makes no sense whatsoever for the government to interfere with that. It would indeed reduce the buyer pool, thus further depressing the market and hampering any recovery efforts.
Lenn please call me Charita. I don't believe I accussed agents of being selfish or insulted anyone (at least not nearly as flagrant as you just insulted me) I've seen far greater insults hurled around AR than I'd like to admit (even some from you). But like you, I believe we all have an opinion and have a right to express it. I merely asked a set of questions. Sorry you took offense and that I put you in such a defensive position and forced you to respond in such an unbecoming manner.
John. Thanks for "getting it". I agree.
Maggie. George is right on the firing line and understands the condo matter far better than any functionary at HUD.
William. Agreed. It makes so little sense, it just makes me want to scream.
Lenn - Growing up in the UK I had plenty of first hand experience with seeing government employees make decisions that had no financial impact on them, regardless of how poor the result of those decisions. Tell the folks that the decisions they make affect their personal financial position and they will "get a clue" one would hope.
Ms. Cadenhead. I have posted 1,857 posts to my blog and I have received 42,576 comments to my posts.
Only four members have made comments asserting or even asking the question of whether real estate agents' opinions are motivated by our paycheck.
Your statement: Or are we just looking at the dent it will put in our pockets (which would look like serving self first instead of our clients) if the home buying process was set back a bit while buyers bump up their savings?
is quite clear.
I just don't understand this at all. I didn't understand why they increased the down payment to 3.5%. FHA buyers are qualified very carefully....I know, I work with these buyers all the time. I never understood the logic that a small down payment means greater risk...sure, if you can just tell the bank what you make and sign a form....but not if you are fully qualified, bank statements, pay stubs, work history, FICO scores etc....like we used to do it.
It seems like the government wants to slow down the market and recovery. The $8000 tax credit was a silly give-away, but FHA was a good program that was actually getting people in homes....they have it backwards.
When the government is involved, there is no telling as to who is calling the shots - and for what reason. The fact that our government is allowing sub-prime loans to be underwritten and sold to investors is inexcusable in my opinion.
Tony. Where the Hell have you been?? Thanks for dropping by.
Indeed, folks from the UK recognize the insidious nature of government interference in the market.
When the government is involved, there is no telling as to who is calling the shots - and for what reason. The fact that our government is allowing sub-prime loans to be underwritten and sold to investors is inexcusable in my opinion.
Lenn - I made my comment and posted, and when the page resurfaced, you had made quite a few responses to some other commenters.
While I understand your point in responding to Charita, I am wondering if you missed the bigger picture that she was trying to point out.
Hmmm...the housing crisis we are now in wasn't the result of one single factor, and did not happen overnight...it was something that happened over the course of time, and we want "fix it right now" policies which may, or may not, help things in the long run.
I agree with your premise that restricting seller concessions will damage the buyer pool considerably. The other side of that coin, which Ms. Cadenhead very eloquently pointed out, is that with less reliance on programs to aid them, buyers will now need to take the incentive to save...and if that means them not buying a house until 6 months, 8 months, a year or more down the road, then at least they will have the financial wherewithal (not withstanding unxepected circumstances) to buy a house on their own.
Does it apply to all buyers? No. But it does apply to enough buyers for it to make sense, for them to put off buying so that the actual recovery is self-sustaining, not propped up by government intervention.
Charita - I will stand with you. Part of the problem is home buyers with too little equity and reserves going in, and without well-developed habits of saving for large expenses. No doubt these changes will reduce the pool of qualified buyers, for a time. I'm not so sure that's a bad thing, if in the end it leads to better [repared buyers.
Good post, but just like all the other low downpayment loan programs that tanked because of defaults, FHA is no exception. Changes have to be made. I think Steve at #40 makes some good recommendations although on the lower score level the MIP should be bumped up to that which is proposed ie 2.25%.
This properly distributes benefits to those who deserve them. Higher scores = less cost.
We really need to get Wall Street back into the lending game, not emphasize FHA tax payer subsidized loans. Wall Street had some good things going, but what was wrong was the 95-100% financing stated income loans, 10% down no doc loans and the drastic rate hikes on 2/28 arms ie: rates from 6% to 11-14% after 2nd year.
But Wall Street won't be able to entice investors to dump money into an FHA look alike program, why? Because the default rates on low down loans. They don't have any equity protection. But for FHA we don't need any protection, we have the tax payers, right?
Although FHA is the best program in town for the low downpayment buyers and considering that 85% of all buyers are using the FHA program, we really need to develop an alternative to FHA.
Socializing lending isn't good. It ties everybody to the sinking boat. Free market lending is better providing there are some restrictions and proper disclosure. The question is how can we start doing it again, better.?
What happens if our recovery lags for 2-5 years and we have 2-5 years of unemployment hikes? Many of the new FHA homebuyers will be forced to walk from their homes. So then what happens? Tax payers flip the bill again.
We need to learn from our mistakes and not repeat them. Great comments from all.
Karen, your comments are always among my favorites. Agreed on the $8k. For every buyer that it brought out, two stayed at home because it reinforced the perception that housing was still weak.
I'm curious about something....for the people that are saying that the seller concessions are going to hurt the buyer pool, is there any evidence of that? Who has fees and expenses that exceed the 3% by much if at all?
William #60 good.
I am most confused by the reduction of seller paid concessions from 6% to 3% as there is no logical reason for the reduction. If someone can give me a real reason, I would love to hear it!
Is it possible that the government is trying to fine tune the amount of homebuying and selling thru HUD in the same manner that they try to fine tune the money supply thru the Federal Reserve?
I can't imagine why they might want to do this, but nothing else seems to make any sense. Just like the Fed does not explain itself on a current basis, so too we might expect to hear HUD spokespeople obfuscate (sp?) somewhat.
Akron, Ohio
With all the changes going on I think we need more lenders to discuss all options with the buyers when they are pre-qualifying so the buyer knows what he wants before he writes the offer. My buyers seem soo confused and have different information than I get. I'm having trouble reaching lenders on weekends when the buyers want to write so I can have information to put in the offer. As soon as I get a pre-approval letter, from now on I'm calling the lender before the home is found to verify what was told to the buyer, because the buyers are too confused lately with several lenders out there and programs offered.
Thomas. Thanks for the chuckle. Obfuscation is the speciality of any government spokesperson.
I was once there. Honestly, I could write a 25 page speech for my Director that would say absolutely nothing.
Jennifer. Their claim is that it inflates home prices when seller closing is added to the price. I don't buy it. In 15 years, we have NOT had buyers interested in paying a dime more than necessary. Buyers are more price concious than HUD gives them credit.
William. If that premise holds, force buyers to save, then we should end the VA program, the USDA program, the county/state/municipal programs that receive government funding to manage programs to dispense grants and loans to home buyers.
My biggest objection to the seller assist is that the govenment is telling a seller what they can do with their own money.
Ditto Steve Loynd!
The term seller-paid concessions is the problem.
Say I want 100k for my home. I'll accept if I can get 95k. If I "accept" 98k with a 3k credit, I have made a concession of $0 as my net is the same.
Concessions are lender-financed and buyer-paid.
Some of us may be over reacting. The UFMIP has ranged from as low as 1.25% up to 2.25% over the past 10 years. It was 1.25% as recently as 2008. That didn't last long, but it was there. The health of HUD's mortgage insurance fund is what determines the amount of the UFMIP. Right now, the fund is lower because the defaults are higher.
The buyers that really want to buy will find a way. And the Realtors and Loan Officers will find a way to help. We always have. Most FHA buyers are first time buyers who dont know the difference anyway.
3% seller contribution... it used to be that way too. Me managed. Now, we'll see more family helping with down and closing costs than ever before.
In Arizona, I'm not aware of any lender that will approve an FHA loan under 620 right now anyway. The increased down for a score under 580 seems to be a non issue.
As long as we let the buyers know what they need to do, they will do it.
Some of us may be over reacting. The UFMIP has ranged from as low as 1.25% up to 2.25% over the past 10 years. It was 1.25% as recently as 2008. That didn't last long, but it was there. The health of HUD's mortgage insurance fund is what determines the amount of the UFMIP. Right now, the fund is lower because the defaults are higher.
The buyers that really want to buy will find a way. And the Realtors and Loan Officers will find a way to help. We always have. Most FHA buyers are first time buyers who dont know the difference anyway.
3% seller contribution... it used to be that way too. Me managed. Now, we'll see more family helping with down and closing costs than ever before.
In Arizona, I'm not aware of any lender that will approve an FHA loan under 620 right now anyway. The increased down for a score under 580 seems to be a non issue.
As long as we let the buyers know what they need to do, they will do it.
At a time when the market is struggling, FHA decides to make it worse. A few months remain for the stimulus package, rumors of higher interest rates.......I'm not sure of the outcome for the remaining months in 2010.
I've never understood why any seller is restricted in how they use equity. This is when it starts to get ugly. State, County and City programs funded by HUD/FHA are starving for money. Most of the local 1st time home buyer programs have either dried up or are just limping along. These are political games to insure more defaults occur. It appears the intent of this ploy is to further ruin and run down America. Sad trully sad to see such bad policy, however; America did vote for change. The bright side is Americans are innovators and although this is intended to harm home sales as your obvious logic demonstrates. As innovators we will find new ways to deal with the situation.
Thank you,
Martin. Sometimes, the more things change, the more they stay the same.
Harold. I can remember when the upfront MIP was as much as 2.75%. Also HUD wants to move some of that cost to annual MIP which will increase monthly payments.
FROM HUD IN 1991.
The 1990 act, among other things, requires FHA borrowers after issuance
of regulations before the end of February 1991, to pay more in insurance
premiums over the life of the loans and in cash at the time of loan
origination. The act effectively raises the present value of the insurance
premium from the current 3.8 percent of the loan amount to from 5.6 to
7.3 percent, depending on the amount of the down payment made. It
accomplishes this with two actions: lowering the up-front premium
gradually from 3.8 to 2.26 percent of the loan amount over a 4-year
period and, during the same period, phasing in a new annual premium of
0.6 percent of the loan balances, with borrowers who make higher down
payments paying the annual premium for a shorter period. It also
requires that the principal obligation on an FHA mortgage be limited to
no more than 98.76 percent of the appraised value on properties
appraised at less than $60,000 and 97.76 percent in the case of a home
with an appraised value in excess of $50,000. This requirement in effect
increases the amount of cash needed at closing by about $664 on a
$66,000 house financed with a minimum down payment.
Some of us may be over reacting. The UFMIP has ranged from as low as 1.25% up to 2.25% over the past 10 years. It was 1.25% as recently as 2008. That didn't last long, but it was there. The health of HUD's mortgage insurance fund is what determines the amount of the UFMIP. Right now, the fund is lower because the defaults are higher.
The buyers that really want to buy will find a way. And the Realtors and Loan Officers will find a way to help. We always have. Most FHA buyers are first time buyers who dont know the difference anyway.
3% seller contribution... it used to be that way too. Me managed. Now, we'll see more family helping with down and closing costs than ever before.
In Arizona, I'm not aware of any lender that will approve an FHA loan under 620 right now anyway. The increased down for a score under 580 seems to be a non issue.
As long as we let the buyers know what they need to do, they will do it.
Sorry. I did not mean to post the same thing again. That was inadvertant.
Harold. In 1990, the upfront MIP was 3.8%.
Terry. Thanks for that thoughtful and insightful comment.
Chris. I've heard that description before and it makes sense.
Lenn - I understand your point, and it is a very valid one - the government shouldn't be telling anyone what to do with their money.
I don't know about dispensing with VA programs...the requirement to get a VA loan is simply that you must be a veteran (and then the credit scores and other qualifying information)...I am in favor of making some allowances for thsoe who have served their country to assist them with a home purchase.
The other programs you allude to? Hmmmm....I don't know enough about them to make a judgment about their necessity or usefulness. You may be right, that if encouraging buyers to save is a goal, then the elimination of those programs (with the exception of VA, as only a particluar segment of the population can use it) might be necessary...
Wait! Those programs would include programs like Teacher Next Door, Policeman Next Door, etc. correct?
Again, those programs are targeted to specific segments of the population, not all buyers would be able to use them. And, there is enough variation between individual buyers to make those programs a necessity for some of those buyers, and a non-necessity for others.
I don't think any practitioner argues with the need for a buyer to be financially sound before purchasing a home. If the new guidelines keep buyers who are too close to the edge financially from taking a step that leads to yet another foreclosure and financial ruin of a young person, I agree with that. Jim's granddaughter has toyed with the idea of buying her first place. With old guidelines, she would qualify. With the new ones, probably not. I am hoping tighter guidelines will keep her on the sidelines until she is truly financially ready to make a purchase. I think she would be a high risk buyer (already working three jobs to make ends meet.) This makes FHA the bad guy - not me- for insisting that she waits until she is really ready :)
William. Indeed, curtailing FHA will surely impact the Teacher Next Door, Policeman, Next Door, etc. unless HUD decides to manipulate the guidelines to exclude them.
Actually HUD already often manipulates these programs by making them available in certain targeted geographical neighborhoods.
The intention is to make people more dependent on government programs for the needy. People who need help are easier to manipulate and more likely to vote for those who control the money. Simple...your tax dollars at work.
Monica. Agreed. I'm all for saving, down payments, etc. for home buyers. That said, if the government is going to spend tax money to manipulate housing, they should not have favorites.
TOTOH, if the government is making a priority of subsidizing the rental market, I want to know why??? That's tax money too.
Sometimes I'm amazed at the complete idiocy that seems to run through the decisions that gov't agencies make. Another thing that wasn't even mentioned in this is the fact that FHA spot approvals will no longer be possible; so that is essentially saying that if you live in a condo or townhome community that isn't on the HUD approved list, you cannot sell to anyone who needs to do FHA financing - in the lower price ranges that's as good as saying you simply cannot sell your propert, period.
Certainly money is tight throughout the entire economy but making it tighter will not solve the problem. To require the lowest man on the totem pole to bear more weight in the form of additional MIP cost and less ability to negotiate with the seller totally defies logic. While everyone concerned wants a qualified buyer increasing that criteria now does not make sense. Buyers seem to be coming out of the bushes as they smell the advantageous market and some HAVE waited too long based on their lack of liquid funds and need for credit repair. They will likely MISS the current opportunity and will now be punished again as the bar was raised while they regrouped. This is not recovery it is punitive.
I disagree. Let's remember not everyone needs to own a home. Do you remember the old saying "you need a little skin in the game!! The changes will make for a stable real estate market in the near future and I hope that is what we all want!!
One of the post blogs I've read including the comments. If nothing else people are starting to talk, and talk passionately, about the issues we have. When this happens it helps me believe that America's best days are still a head.
Gary. Thanks. Glad you dropped by.
Michael. Perhaps. I'm not convinced that no "skin in the game" is a precursor to default.
Linda. Agreed. When the housing industry recovers, some of the folks who buy now at the bottom of the market, will benefit from the recovery. I don't want the government picking and choosing who will be the beneficiary of that recovery.
Matthow. BUT, don't forget the investor buyer who can pay cash and then convert to a rental unit. Of course, the folks who cannot now get financed can rent the same unit they would love to have purchased.
When we all get back to the understanding that Owning a Home is a privilege and NOT A RIGHT! The better off we all will be. What amazes me is the fact that I see Investors (my clients) making offers and purchasing property everyday without concern whatsoever. We always find, legal and creative ways to work around the problem. Here in Ca. we have so many State, County, and local first time home buyer programs available, you can still buy a home with 100% financing. Some of these programs are already implementing changes within to accommodate these new Hud rules. The bottom line is; If you don't have skin in the game like Michael said and you need a hand out to buy a home-Then, in my professional opinion, you probably can't afford to OWN it.
The increase in the MIP will result in something like $2.77 per month per $100,000 purchase price... for FHA, that adds up to a great deal of money... for a buyer of a home priced at $300K, this means their monthly payment will increase by $8.31 per month... I am not sure how that will impact many buyers... the decrease on the seller concession is more significant... let's see... what are closing costs on a $291K Loan ($300K purchase, minus 3% seller concession, and not including a minimum down payment which also reduces the loan amount... ??? $9000 is 3% of $300K... $10,185 is the 3.5% downpayment, so really the loan would be $280,115, so the MIP would be even less per month...
I can see the decrease in seller concession amounts making an issue for buyers, provided they would have received the entire 6% in seller concessions in any event...
But then, people buying homes should really have some "skin in the game" as was said above... for someone buying a $300K home, ten grand down is really not so bad to ask... especailly during this time of tax credits, which I have heard of being used for downpayments, no? Have not had that used that way in our firm, but I did hear of an agent that was using it for a purchase, although we did not get into that deal with them, so I cant say how it worked out...
To my mind, if you cant come up with the 3.5% down, you really should not be buying a house... remember the days when most buyers came up with a minimum of 10% down? Man with up to 20% down... I realize this may take some bread off my table, but it will help to stabilize the market a bit, by having more capable buyers, and perhaps thereby fewer defaults...
All that said, I am willing to say that whatever any administration does, they do have the interest of the American people at heart, whether we like the methods or philosophy or not... I am sure that the Republicans really do believe that cutting taxes spurs business which will result in more jobs, despite the fact that we have not ever seen such a "fact" actually take place. And I am sure the Democrats honestly believe that priming the pump with funding works better, and will be of help to the economy in the same way, regardless of the fact that the deficit is already through the roof...
THey mean well, whether we agree with the policy or not... we should at least trust the motives, whether we like the methods or not.
Matt. I agree with much that you said. However, I just don't believe that the American home owners should be made the whipping boy for the mortgage mess and that's what these new FHA rules are doing.
Wow, Lenn! I wrote about this just the other day. Our median home price is $140,000 so this will have a huge impact on our market. I agree with you. What were the gov't officials thinking? Or were they thinking at all?
Kim. I don't believe that they have to think. They have an agenda and they are following it.
Of course, I'm paranoid.
Thankfor the update- I do my best to stay informed and that just helped out a lot!
Sadly these changes are meant to continue to have the capactity to lend in ther future to qualified buyers. At the end of the day no real buyers outside the want our Treasuries or MBS pools. if we do notincrease the credit grade and the criteria of borrowers entering into government insured loans, this very program will also go by the wayside. The private entities already understand that many regions within the United States will see future real property values decrease by another 30%. I live in NY and can tell you firsthand that only 20% of the homes are affordable at todays level when comapred to family median income. No private purchasers means that the government programs must thin the herds to ensure these programs will remain solvent. I am not suggesting that realtors learn more about securitization and pooling-I am merely asking that they understand the chain after they have taken their commission check home from the closing.
Even the folks at FHA now recognize that the current pools are still over-leveraged to the extent that if tomorrow these scoundrels at the commercial banks had to mark the assets to the aisle-they would all be insolvent. In summary, the Government does not want to intervene within the mortgage market. they must, because no other will. Quick Question - How would anyone get financing if they removed FHA through a US default on Fannie & Freddie Crap? Just wondering!
James. You make some good points.
I still believe that HUD had ample opportunity to adjust the MIP to a rate that would keep the fund solvent. They dragged their feet and dragged their feet until insolvency forced them to Draconian solutions that were punitive to FHA home buyers.
There are probably more Realtors that understand Securitization and pooling than you would suspect.
Further, most of us object to the suggestions that Fannie and Freddie be abolished, knowing the chaos that would cause. No secondary market, would easily limit home buyers to a few private lending sources.
We know it's complicated.
We also know that business is more complicated than just our commission checks.
As a Mortgage Lender, I not only approve of the new 'enforcement' - I welcome it!! We DREAM of it!! Any FHA DE Lender who has a Default Ratio of 300%, that's three times the average of its peers, IMO probably deserves to have its approval terminated. That's where the focus of the new enforcement will be placed - even though the rule has long been you're out at 200%, it's not been enforced.
Our branch Default Ratios range from 37% to 56%, a direct result of prudent underwriting of the classic Four C's - Credit, Capacity, Collateral, and Character. Any company not underwriting to those standards is directly harming the FHA Insurance Fund.
Lack of enforcement of current regulations, leads to new regulations (FHA Reform, RESPA, HVCC, MDIA, etc.) that the rest of us must deal with - and pay for.
Jana
P.S. I agree with you on Sales Concessions and wish they would have went to say, 4 or 4.5%.
Jana.
The buyers that we represent, primarily FHA for the past 2 years, do not default.
I have absolutely no objection to lenders demanding full documentation and conservative ratios. I would do the same.
I simply believe that the measures taken are an overreaction to poor oversight in the past. Punishing prospective buyers didn't have to be the cure.
In our market it is hard to buy with FHA anyway as the cash buyers or buyers with big down payments step in and buy most everything. I think that FHA should still loan if the buyer has bad ratio's on paper but a good rent history. This would help self employed people like myself. It would be cheaper for me to own my home than rent it by about 30 to 40% a month, tax and insurance included.
I have said before I will say it again we are not recovering and govt efforts seem to be contrary to support a recovery for main st,,, and has done more for wall street
Lenn,
I was simply replying to your comment wondering how Lenders felt about the proposals for Lender Enforcement. In short, my answer was - it's about darn time. I agree with your observation that FHA buyers over the last two years typically do not default and that is documented by our low Default Ratios. I do not want to punish our buyers, afterall, they are my clients.
I want to punish Lender's with 300%, 400%, 500% ++ Default Ratios in the last two years. I want to know why their borrowers default while yours and mine don't. I want to stop paying for their poor UWing decisions. I want their Underwriting Authority teminated by HUD - and I want it now :)
101 responses and nearly all of them in agreement. But, why is it the government's job to insure mortgages for people with poor credit, and no savings? Raising these guidelines will help the lenders, and the buyers in the short run and in the long run. Prices are still inflated, considering median incomes, and add in the excess inventory leftover from "investors" and builders who are still churning out housing, prices are still coming down.
Lenn - I don't understand why our government tries to stimulate the housing market with tax credits and ignores what's going on with the mortgage market. One hand giveth and the other taketh away. Then they wonder why the recovery is stalled.
Lenn, i agree with your post. back in 2000 or 2001 is when FHA actually reduced the UFMIP from 2.25% to 1.5% because they had a $16 billion dollar surplus in the insurance fund. Seller contributions were still capped at 6% and down payment assistance programs were everywhere. You could literally buy a house with no money out of pocket using an FHA loan.
Fast forward ten years and look at the mess we are in now. The thing is, its not because of a failed model that was being used successfully by FHA for years, in my opinion it comes down to one main thing, JOBS. with some many people out of work, borrowers and loans alike that were considered low risk are defaulting left and right. Couple that with the fact that Fannie and Freddie have tightened the screws so much many people were flocking to FHA loans because they were really the only option left for many borowers/buyers. The result being that FHA now has a lot more loans on their books for people to default on. Tightening FHA guidelines even more isnt going to solve the lack of jobs problem; it is just going to prolong th agony.
Gene. Problem with that is that if the ratios are high, far too many FHA borrowers will not have the reserve funds (not required) to make emergency repairs, manage health emergencies or loss of job emergencies.
Keeping the ratios low gives home owners some breathing room and permits saving for a rainy day.
The solution for the high ratio matter is not to increase allowable ratios, it is for home buyers through knowledgeable and experienced agents to limit their home search to communities in price ranges where the buyer is not stretched to the limit to buy.
#100. Agreed. Billions to Wall Street and lip service to Main Street.
#101. Agree 100%. I would favor pulling the plug on any lender whose defaults reach a percentage of closed loans. Of course, there is the possibility that the lender will have to buy back a default, but the time for that is very short.
This is a remedy that would be very easy to determine by a simply computer search. WAIT! Please don't tell me that the government doesn't have a database that tracks lenders with a percentage of defaults. At this time, I don't know. I'm just saying. . . . . . .
John N. Whether it's the "government's job" or not is not the question. Since the 1930s, the FHA mortgage insurance has been in place and has worked. If, and perhaps the real question is, if home ownership is a societal benefit and I believe that it is, the FHA insurance program brings home ownership to millions that have been unable to meet the demands of the private mortgage market.
Don't forget, for decades, the FHA loan was the only loan available to millions of borrowers who, through racial discrimination, red lining and arbitrary underwriting demands, prevented millions of Americans from buying a home for their families.
Don't forget also that the FHA insurance program is not a tax burden on Americans. The program is funded through the MIP, which is why, through actuarial balance, the premium should have been raised a couple of years ago. The present default of the insurance fund is through government mismanagement of the fund.
Gail. This isn't the first time that government offices don't know what each other is doing.
#104. Indeed. The failure isn't the FHA, it's the government's mismanagement of the economy. FHA works.
Along with many other things regarding the government, this is yet another wrong answer to a big problem. So, we have stopped the space race, so much for the long term survival of the human race, and among other things we are now making it impossible for a certain sector to get fha mortgages. I see more second home purchases ending up in foreclosure then I do the entry level homes. I really don't know if that is true statistically, it's what I notice in the field. I think that when I bought my first house 11 years ago, the initial down payment really didn't have much of an impact for me month to month as the interest I paid on that loan. When you don't make a lot of extra money, it is as hard to save 3.5 percent as it is for someone who makes more to save 20 percent. If you save that 3.5 percent, it represents the same amount of discipline and good faith in my eyes. I really find it hard to believe that these loans have such a huge impact on the overall deficity/budget. I would love to see the financials for everything else we are paying out. I am sure if we slashed 10 percent from the many widgets that the government is paying for, we could balance out the housing budget a bit better. I'm just saying. Really, I am not well versed and have probably said some uninformed statements. But I am having a visceral reaction to this.
Melinda. My reaction was visceral too.
IMO, this isn't a matter of FHA loans defaulting for FHA buyers.
This is a matter of the government electing to DENY home ownership to a large section of otherwise qualified and worthy home buyer.
Remember it's all about Helping the consumer!!!
I personally think the Goverment has prolonged the housing crises for another Two years with everything they have brought in "help"!
I turn down 2 out of three people I speak to that actually fill out an application! That number is fast becoming 1 out of 4!
Good Day Mates!
It seems to be a double edged sword. In the first place we need more sales to shore up the sagging real estate market but secondly we need a secure FHA so they can have the capability to continue to issue mortgages. More government red ink is going to be troubling in and of itself and their spending without restraint continues to compound the problem. This adjustment to FHA funding and insurance guidelines comes at a delicate time unfortunately.
If Washington could take the approach like was taken under the Reagan administration to lighten the burden on taxpayers like they did on reducing capital gains taxes, it would loosen credit and capital flowing into the market and the market would correct itself without all the meddling from Washington.
It appears Washington is bent on controlling all aspects of our lives.
well written. great post.
Government must wake up to the fact that IT is the problem. Making home buying more difficult is absolutely compounding the difficulties we are all in right now.
Lenn....Love reading your blog! I admire your moxy! Thankyou for blogging about these upcoming FHA changes.
I recently went to a luncheon with the CEO of a local mortgage lender here in Va Beach and asked him what specifically would be outlined on the GFE and he replied by saying all costs related to the buyers loan and associated with the HUD 1 would be fully disclosed on the GFE.
I didn't say anything further to the gentleman at the luncheon but shouldn't that have been the true intention of the Good Faith Estimate anyway? Will these new "FHA changes" change how info like the buyers interest rate and payment are disclosed? I appreciate all opinions on this.
~Nancy
Lenn - I just don't understand what they are hoping to accomplish. Two steps forward, one step back.
It's all about the banks security, we've had it the other way and look what happened!
Lyn. I don't see where this change in the MIP has any relevance to banks security. The MIP insures the loans. All they had to do was adjust the MIP and replenish the fund.
Carol. I wish I didn't understand, but I believe that I do.
Nancy. The new GFE doesn't make any sense. It added a page and eliminated the monthly payment.
Frank. BINGO!
Stephanie. Thanks.
Mark. I see these changes as an attempt to reduce home buying opportunities for absolutely no reason. We have an MIP problem. Not a buyer problem.
Ben. The tax credit and proliferation of "programs" has brought out a lot of wood be buyers that are not going to meet the guidelines. Without the "programs" you wouldn't even be hearing from the.
Not only should FHA leave things as they are, but they (along with VA) should re-institute the non-qualifying assumption. Talk about properties moving with investors when times get tough...
I waited until no one would see my comment, Lenn, because I REALLY BELIEVE that the nq assumptions somehow, don't know how, were far more beneficial (perhaps due to the required by seller cash, take over payment requirment) better than what lenders provided in recent years- get rid of it QUICK if the market tanks. As it is now, no getting a loan without hoops- no salvation from those with a nice take over payment $, but iffy credit.
Laurie. I sold a lot of non-qualifying assumptions. In the 1990 or so market, it was the only way families has of moving up. We sold the first home, usually a condo, through assumption and used retirement fund money to buy their dream home.
Thank you Matt (#89) for pointing out the home ownership is a privelege, not a right. More specifically, borrowing money to buy a house is a privelege, not a right.
Jim & Linda (#80) saved me some typing. Well said.
Steve & Tina's (#40) suggestion is definitely on the right track--A better alternative to the new FHA rules.
While I think there may have been better ways for HUD to implement a change that would filter out buyers who are more likely to default, there's nothing wrong with requiring a borrower to have more skin in the game. Who do you think is more likely to walk away from their house if things get tough--someone who has $20K+ of their own hard earned savings tied up in their house, or someone with nothing into it?
HUD is infringing on the seller's rights to use their equity as they please. I wrote post about that very thing yesterday talking about work-for-equity requirement changes. Now, we can't even give credits as we were in the past to our buyers unless they're "approved" by government guidelines.
This is a very scary time as more and more regulations take control.
I don't get it. How, preferably with numbers, does this impact the seller's right to use their equity?
David. That solution simply punishes the prospective home buyer who would make their payments. Why not put the burden for default on the mortgage system that approves their loan?? A simple piece of software would easily identify lenders and loan officers who are "stretching" qualifying limits, approving without documentation, etc.
Karen. I agree completely. The home owner/seller's right to the use of their own equity is one of the things that infuriates me about this nonsense.
Chris. Goodness. If the seller can contribute 6% of their net proceeds to the buyer, now reduced to 3%, is that not interferring with the seller's right to use their own assets to sell their home???? They are willing and able to reduce their net proceeds by 3% of the purchase price. The government should not interfere with that.
A buyer who has 3.5% to make their down payment is less worthy if the seller wants to pay their closing, but the buyer who uses tax supported "programs" to pay their down payment and closing is O.K.??????
When a buyer gets closing and down payment from the government, they have no skin in the game.
When a seller pays closing costs for a buyer, that's the free market at work.
What's hard to understand?
Sellers contribute from gross sales price, not net equity. Otherwise, the amount of the seller's mortgage would influence the amount of the credit.
There is no "equity" inherent to the gross sales price. A $100k offer and a $102k offer with $2k credit are exactly the same as relates to equity. The IRS, an accountant or any financial planner would all agree to that. It's financially wrong to say that these changes influence what a seller can do with their equity.
Regardless, I don't understand how it is a factor. Without DPA programs where that credit was being run through an AmeriDream type company, this has zero impact on required down payment.
The only impact is on cash-to-close and that is only when there are more than 3 points of closing costs in a transaction. Maybe it is smaller price points or there are huge regional variances, but are more than 3 points normal in your area?
Good grief Chris. If a seller is has no mortgage and contributes 6% to the buyer's closing, net proceeds are $90,000 before paying commissions and other charges.
If the seller pays 3% to the buyer's closing, his net proceeds are $97,000 before other charges.
What's so complicated$ Playing symantics doesn't change the seller's bottom line.
All the seller cares about is what they walk away with. If they choose to contribute $XXX to the buyer's closing cost, it's none of the government's business.
Lenn, I posted about this last week, and it's certainly of major concern for homebuyers. I certainly understand the need for HUD & the FHA to mitigate their risk, but in a time where we are throwing money at all kinds of ineffective programs, why don't we throw a little towards the FHA so it can leave well enough alone. All of the gains we received from the 1st time buyer credit could be lost with these changes to FHA insured loans. Housing will lead us out of the recession, and these changes will do nothing but delay the recovery further.
Matt. It isn't necessary to throw a dime at the FHA insurance deficiency. A simple adjustment of the MIP would have achieved the desired result, kept FHA reserves within the law and not contributed to the destruction of the real estate industry.
These Draconian measures are punative for existing and future would be home buyers.
The goal cannot be solvency of the MIP fund. It has to be the deliberate further destruction of the real estate industry.
THe thing is the politicians actually believe that this will work, without taking our opinions and experience into play. We are doing this every day, all day. We all know that lowering seller concessions isn't going to work.
Amy. I am of the opinion that there is a deliberate, planned scheme to destroy the real estate industry as we know it.
I also know that our economy will not recover until and unless the housing industry recovers and for that to happen, every home owner who can will need to be in the housing market.
Reducing the buying pool isn't going to help.
Lenn -- I hope you sent this post to Secretary Donovan.. I think they need to rethink this whole thing. With the tax credit ending and the expected rise in the interest rates, there will be fewer buyers than ever who can buy a home.
Joan.
Donovan wouldn't know what I was talking about.