I think there should be way more public say when it comes to billion dollar govt plans. We all know that Politian’s have one eye on their own interests so why not put more initiatives to the public vote, or at least have a more public debate where real people can share their concerns?

James
.-= DP Mortgage Life Insurance´s last blog ..Mortgage Life Assurance =-.

My take on the 'proposed' changes to FHA is a progression toward buyers having more of a vested interest in what their purchasing. Although, this will make conventional financing a contender once again. I'd like to see the apples-to-apples comparison between the two once these changes are finalized.

Great site, Jay! I'm waiting to hear what you have to say about these new RESPA changes effective Jan 1st. What say you?

With all political views aside, I think they have no idea what they are doing. It would be like giving an animal a piece of bread and then trying to kick the animal when it's eating. Oh lets help the housing market by ext. the tax credit but by the way good luck getting qualified.

Jay,

I have to completely disagree with you on this one. Realtors need to get their hands out of their pockets for once and think big picture. If a person can't afford a home they have no business buying one. I'm all for helping people get into homes! But not if they can't make the payments. If you can't "scrape" together 5% then how in the world can you do the upkeep and have anything left over in case "life happens"? We all need to stop living paycheck to paycheck and start paying our way as we go. And this is coming from a democrat!

John

Just saw Stephen's comments. Assuming true, this whole things makes a little more sense.

Doug

Jay,

Does seem that they are sending conflicting messages.

I'm guessing that this amendment will go into effect after the expiration of the first-time home buyer tax credit? If this is the case, maybe their idea is similar to how they're handling the Fed Rate. Just as the rate is zero now, as soon as they're satisfied that the economy is doing a little better, they'll jack up interest rates to avoid inflation. So maybe they felt the housing market needed a just little more juice to stand on its own (thus the extension),then, they will quickly reign it in (thus the new legislation). Not saying I agree with it, just guessing at what they're thinking.

Also, you should take a look at this article: http://www.cbsnews.com/stories/2009/11/29/evening...

Considering that the FHA's exposure has quadrupled in the last 3 years, they are clearly concerned about their exposure/independence and long term viability....and probably about time.

Doug

Hr 3706 has 28 sponsors/co-sponsors. 27 Republicans (including my own rep John-"the baby whisperer"-Shadegg, and Trent Franks) and 1 Democrat. This bill is probably not going anywhere.

3.5% of a $277k home (Dec 2007 Phoenix median) = $9,695

5% of a $183k home (Dec 2009 Phoenix median) = $9,150

The actual dollars are not changing that much. If someone could scrape together the down payment 2 years ago, they could likely still do it today.

It is weird that Rep. Garrett voted for the extension and then offered this bill. Most of his co-sponsors voted NO or abstain on the bill that contained the extension (again Shadegg & Franks).

Where's the "like" button on this post?

Dean and I think alike on this - I hope these new regulations keep people out of homes they can't afford. And clearly the tax credit is another form of wealth redistribution. The way these politicians talk out of both sides of their mouths IS annoying, regardless of which outcome you're looking for.

Great read Jay. I think they walk a thin line between trying to stimulate/help borrowers get into homes and making sure the highest percentage of those borrowers as possible can actually afford the home. Personally I like the increase in down payment because I know that it decreases the likelihood of someone getting into a house that they can't afford. If you do not have enough excess income to save up 5% over time then maybe you are not in a financial position to purchase a home (yet).

Insightful juxtaposition!

Which makes me think these proposed FHA changes are probably just political maneuvering. FHA may not really intend to make the changes. Their real purpose may be to justify their future bailout; "Hey, if you Congress dudes don't bail us out, we're going to make all these changes and blame them all on you. Naner, naner, naner."

I'll go with the clueless answer. The three quotes you used above come from three people that don't know much about the economy. At least they're past statements lead me to believe that they don't know much.

Can't buyers use the tax credit for a down payment and closing costs? If so, it's basically a wash.

Its because some are working for themselves, some are just puppets for the corporations that put them there, and some are honestly trying for the common good (though it is debatable as to whether or not they even know what that is). The issue that I see most of the time is the special interests. People using their positions to make money and make money for their friends and family at the expense of the rest of us, all while pretending that they are helping. The problems are not even along party lines, they are all baboons.

-Tyler

And Dave I need to agree with you completely, honestly some of the best and brightest are in washington... so say no one? Come on let's not over dramatize, lets go out and find more to support that can work with the good ones we have there

First as you know we agree politically and we agreed about the credit not being extended. But I have to say I like what they are doing here with making fha's harder. Some people should not be buying a house, and with the cost of home ownership that can occur and most people do not budget for, if you want to buy a house you SHOULD be able to put 10% or more down (I think 5 is to low) or maybe you should consider renting until you can afford it.

And these loans backed by the FHA are not backed by the government, they are backed by me and you... and if I am loaning money I want the borrowers to have more skin in the game and be solid financially.

It's simple Jay. Washington thinks it can run everything when in reality no one there is qualified to run anything. No one there has ever started a small business, had to meet payroll, etc. No one there has even an inkling of what it's like to operate in the real world.

I think there should be way more public say when it comes to billion dollar govt plans. We all know that Politianu00e2u0080u0099s have one eye on their own interests so why not put more initiatives to the public vote, or at least have a more public debate where real people can share their concerns?

James
.-= DP Mortgage Life Insuranceu00c2u00b4s last blog ..Mortgage Life Assurance =-.

My take on the 'proposed' changes to FHA is a progression toward buyers having more of a vested interest in what their purchasing. Although, this will make conventional financing a contender once again. I'd like to see the apples-to-apples comparison between the two once these changes are finalized.

Great site, Jay! I'm waiting to hear what you have to say about these new RESPA changes effective Jan 1st. What say you?

Great post and I like the updates to the site Jay!

With all political views aside, I think they have no idea what they are doing. It would be like giving an animal a piece of bread and then trying to kick the animal when it's eating. Oh lets help the housing market by ext. the tax credit but by the way good luck getting qualified.

Jay,

I have to completely disagree with you on this one. Realtors need to get their hands out of their pockets for once and think big picture. If a person can't afford a home they have no business buying one. I'm all for helping people get into homes! But not if they can't make the payments. If you can't "scrape" together 5% then how in the world can you do the upkeep and have anything left over in case "life happens"? We all need to stop living paycheck to paycheck and start paying our way as we go. And this is coming from a democrat!

John

Just saw Stephen's comments. Assuming true, this whole things makes a little more sense.

Doug

Jay,

Does seem that they are sending conflicting messages.

I'm guessing that this amendment will go into effect after the expiration of the first-time home buyer tax credit? If this is the case, maybe their idea is similar to how they're handling the Fed Rate. Just as the rate is zero now, as soon as they're satisfied that the economy is doing a little better, they'll jack up interest rates to avoid inflation. So maybe they felt the housing market needed a just little more juice to stand on its own (thus the extension),then, they will quickly reign it in (thus the new legislation). Not saying I agree with it, just guessing at what they're thinking.

Also, you should take a look at this article: http://www.cbsnews.com/stories/2009/11/29/evening...

Considering that the FHA's exposure has quadrupled in the last 3 years, they are clearly concerned about their exposure/independence and long term viability....and probably about time.

Doug

Hr 3706 has 28 sponsors/co-sponsors. 27 Republicans (including my own rep John-"the baby whisperer"-Shadegg, and Trent Franks) and 1 Democrat. This bill is probably not going anywhere.

3.5% of a $277k home (Dec 2007 Phoenix median) = $9,695

5% of a $183k home (Dec 2009 Phoenix median) = $9,150

The actual dollars are not changing that much. If someone could scrape together the down payment 2 years ago, they could likely still do it today.

It is weird that Rep. Garrett voted for the extension and then offered this bill. Most of his co-sponsors voted NO or abstain on the bill that contained the extension (again Shadegg & Franks).

Where's the "like" button on this post?

Dean and I think alike on this - I hope these new regulations keep people out of homes they can't afford. And clearly the tax credit is another form of wealth redistribution. The way these politicians talk out of both sides of their mouths IS annoying, regardless of which outcome you're looking for.

Great read Jay. I think they walk a thin line between trying to stimulate/help borrowers get into homes and making sure the highest percentage of those borrowers as possible can actually afford the home. Personally I like the increase in down payment because I know that it decreases the likelihood of someone getting into a house that they can't afford. If you do not have enough excess income to save up 5% over time then maybe you are not in a financial position to purchase a home (yet).

Insightful juxtaposition!

Which makes me think these proposed FHA changes are probably just political maneuvering. FHA may not really intend to make the changes. Their real purpose may be to justify their future bailout; "Hey, if you Congress dudes don't bail us out, we're going to make all these changes and blame them all on you. Naner, naner, naner."

I'll go with the clueless answer. The three quotes you used above come from three people that don't know much about the economy. At least they're past statements lead me to believe that they don't know much.

Can't buyers use the tax credit for a down payment and closing costs? If so, it's basically a wash.

Its because some are working for themselves, some are just puppets for the corporations that put them there, and some are honestly trying for the common good (though it is debatable as to whether or not they even know what that is). The issue that I see most of the time is the special interests. People using their positions to make money and make money for their friends and family at the expense of the rest of us, all while pretending that they are helping. The problems are not even along party lines, they are all baboons.

-Tyler

Sorry Disagree with Dave not agree

And Dave I need to agree with you completely, honestly some of the best and brightest are in washington... so say no one? Come on let's not over dramatize, lets go out and find more to support that can work with the good ones we have there

First as you know we agree politically and we agreed about the credit not being extended. But I have to say I like what they are doing here with making fha's harder. Some people should not be buying a house, and with the cost of home ownership that can occur and most people do not budget for, if you want to buy a house you SHOULD be able to put 10% or more down (I think 5 is to low) or maybe you should consider renting until you can afford it.

And these loans backed by the FHA are not backed by the government, they are backed by me and you... and if I am loaning money I want the borrowers to have more skin in the game and be solid financially.

It's simple Jay. Washington thinks it can run everything when in reality no one there is qualified to run anything. No one there has ever started a small business, had to meet payroll, etc. No one there has even an inkling of what it's like to operate in the real world.