Housing Loans... new rules racist??

[LuckyKBoxer]

http://www.msnbc.msn.com/id/43316132/ns/business-eye_on_the_economy

"If this rule goes through as it stands, the demographic of borrowers who get (favorable rates) will be white and wealthy," said David Stevens, chief executive officer of the Mortgage Bankers Association and former commissioner of the Federal Housing Administration. "African-American, Latino and first-time home buyers will be charged higher prices."

so are the new rules racist?
are the practical?
is this guy a racist for making these comments?

I think that the problem we just had was started from Congress passing legislation to make the loans more accessible to low income and traditionally unqualifiable people, which led to the bubble and the meltdown in the first place.

are we really going to recreate the same atmosphere that caused the issue to begin with?

wtf is wrong with these people?

 

[KELLYG]

I don't think that it is about race as much as MONEY. Some people can not afford to come up with 20% down payment in cash, regardless of color. This will make the person that does not have the 20% down have to pay more in interest and in some cases have to carry mortgage insurance. Net the wealthier you are the more breaks you get.

 

[granfire]

Well, maybe it keeps people from buying above their means!

 

[KELLYG]

Then maybe we won't have housing bubble part 2.

 

[Carol]

Living above my means wasn't the issue for me.

If I had to come up with 20 percent down, I'd still be renting. Even with an FHA loan, I bought very conservatively (some say too conservatively) because I wanted a chance at staying in my home even if I was laid off.

 

[Flying Crane]

Well, maybe it keeps people from buying above their means!

but is it the interest rate itself that pushes it above one's means? If more favorable rates go to the wealthy who really don't need the extra boost, what's the point in that? The working class and middle class folks who otherwise are financially sound might be forced out of the market simply because they don't get a favorable rate, while the wealthy do. Doesn't make sense to me.

 

[Big Don]

but is it the interest rate itself that pushes it above one's means? If more favorable rates go to the wealthy who really don't need the extra boost, what's the point in that? The working class and middle class folks who otherwise are financially sound might be forced out of the market simply because they don't get a favorable rate, while the wealthy do. Doesn't make sense to me.

So, favorable rates should go to poor risks? Yeah, this is why you aren't a banker...

 

[Flying Crane]

So, favorable rates should go to poor risks? Yeah, this is why you aren't a banker...

please point out to me where I said "poor risks".

To quote myself, I said, "The working class and middle class folks who otherwise are financially sound"

I'm not a banker because I choose to not be a banker. Please stop the personal attacks.

thanks.

 

[Big Don]

No personal attack there. However, people who are good risks, with substantial assets get lower rates for the simple reason that they are good risks and they get lower rates the same reason people with good credit get lower rates on credit cards and car loans. People who are poorer risks get poorer rates, because they default a lot more often than people who are good risks. Banks and lenders charge them more, because it costs them (the lender) more when they have to foreclose and resell a property than when someone pays in full, on time. Race only enters into this if you are a racist.

 

[Flying Crane]

No personal attack there.

yes, it was and there is really no point in pretending otherwise.

If you wish to apologize for it now that it's been pointed out to you that it was inapproprate, that's another issue.

 

[Archangel M]

I don't think that it is about race as much as MONEY. Some people can not afford to come up with 20% down payment in cash, regardless of color. This will make the person that does not have the 20% down have to pay more in interest and in some cases have to carry mortgage insurance. Net the wealthier you are the more breaks you get.

I couldn't have come up with the 20% myself. Thank goodness for the good ole GI Bill...made those 2 enlistments worth my while in the end.

 

[LuckyKBoxer]

yes, it was and there is really no point in pretending otherwise.

If you wish to apologize for it now that it's been pointed out to you that it was inapproprate, that's another issue.

that was not a personal attack.
people need to get thicker skin.
also I think what he said is correct, wealthier people get lower interest rates because they are little risk, even a person with decent credit but much lesser means is a bigger risk.

 

[Flying Crane]

also I think what he said is correct, wealthier people get lower interest rates because they are little risk, even a person with decent credit but much lesser means is a bigger risk.

I guess in my opinion that is the real question. People who do not make as much but can afford the mortgage for the house that they have chosen, and otherwise have good credit, have shown a history of staying on top of their debt and finances, why not give them the better rate as well? I'm not talking about a low interest teaser rate that's set to balloon five years down the road. That's what caused the housing crisis of the last few years. I'm talking about a 30 year fixed. Why can't the guy who makes less but is just as responsible financially, if not more so, than the wealthy guy, get the same break? Why do the wealthy get the breaks, just for being wealthy?

A difference of a percentage point or two on a mortgage can mean the difference between being able to actually afford it, or not.

 

[Flying Crane]

that was not a personal attack.
people need to get thicker skin.

It was, actually. It was a sarcastic and snide remark intended to imply that I lack the sophistication and intelligence to handle money and make sound financial decisions. It was inappropriate.

 

[Carol]

In one of Rush Limbaugh's books...I think it was "The Way Things Ought To Be", he talks about programs to bring working class (read: lower income) people in to homeownership, and why such programs work well. I believe his comment was "people don't burn what they own." More owner-occupied properties means better cared-for properties, better neighborhoods, etc.

 

[LuckyKBoxer]

I guess in my opinion that is the real question. People who do not make as much but can afford the mortgage for the house that they have chosen, and otherwise have good credit, have shown a history of staying on top of their debt and finances, why not give them the better rate as well? I'm not talking about a low interest teaser rate that's set to balloon five years down the road. That's what caused the housing crisis of the last few years. I'm talking about a 30 year fixed. Why can't the guy who makes less but is just as responsible financially, if not more so, than the wealthy guy, get the same break? Why do the wealthy get the breaks, just for being wealthy?

A difference of a percentage point or two on a mortgage can mean the difference between being able to actually afford it, or not.

lets work this through a bit more..
most people are probably not far from being bankrupt if they were to lose their job and had to pay all their bills for an extended period.

someone who is wealthy and puts 20% down, and has a smaller monthly payment, and great credit, and wealth is most likely going to not have to much of a problem in comparison.

i guess the sticking points are what one thinks of in regards to wealthy to begin with..
when I consider wealthy i consider someone who could probably pay cash for an investment like a home but instead will put just enough down to get the best rates on borrowing money so that their money is working for them.

someone who is not wealthy would not be able to buy an investment like a home with cash, and does not even have the 20% to put down, meaning they have little "skin" in the game so to speak, and if it did come down to a financial hardship they would be much more apt to walk away write it off and try to restart eslewhere.

there is a huge difference in risk factors whether you think there is or not.

 

[LuckyKBoxer]

It was, actually. It was a sarcastic and snide remark intended to imply that I lack the sophistication and intelligence to handle money and make sound financial decisions. It was inappropriate.

no that was your take on it, i took it as you made a comment that has no merit in economic terms, and we are talking economic 101 here, so obviously not something a banker would do.
would be a few notches above giving a person a loan on little more then his word and a handshake.

 

[Twin Fist]

In one of Rush Limbaugh's books...I think it was "The Way Things Ought To Be", he talks about programs to bring working class (read: lower income) people in to homeownership, and why such programs work well. I believe his comment was "people don't burn what they own." More owner-occupied properties means better cared-for properties, better neighborhoods, etc.

they still have to be able to PAY FOR IT, and the people that frannie and feddie FORCED banks to loan to COULD NOT pay teh mortages

democrat social programs are what caused this entire mess

 

[Flying Crane]

no that was your take on it, i took it as you made a comment that has no merit in economic terms, and we are talking economic 101 here, so obviously not something a banker would do.
would be a few notches above giving a person a loan on little more then his word and a handshake.

Yes, that was my take on it and I believe the intent of the comment was to antagonize and aggravate. Attack the message, not the messenger. Don attacked the messenger. It was inappropirate.

 

[Flying Crane]

lets work this through a bit more..
most people are probably not far from being bankrupt if they were to lose their job and had to pay all their bills for an extended period.

someone who is wealthy and puts 20% down, and has a smaller monthly payment, and great credit, and wealth is most likely going to not have to much of a problem in comparison.

i guess the sticking points are what one thinks of in regards to wealthy to begin with..
when I consider wealthy i consider someone who could probably pay cash for an investment like a home but instead will put just enough down to get the best rates on borrowing money so that their money is working for them.

someone who is not wealthy would not be able to buy an investment like a home with cash, and does not even have the 20% to put down, meaning they have little "skin" in the game so to speak, and if it did come down to a financial hardship they would be much more apt to walk away write it off and try to restart eslewhere.

there is a huge difference in risk factors whether you think there is or not.

So are you saying that you feel someone who could pay cash outright for the home, should get a lower rate, by virtue of that wealth?

I simply disagree with that position.

Lots of people are in between. They can make the 20%, or maybe a bit less or a bit more, but are far from being able to pay cash for the whole purchase. They have good credit, they have ponied up the down payment, they have shown a history of financial responsibility. In my opinion, give 'em the same rate.