Squeeze in lending rules choking condo market

Reps. Barney Frank (D-Mass.) and Anthony Weiner (D-N.Y.) sent a letter to the chief executives of Fannie and Freddie asking them to review the 70 percent threshold.

Our great Dummycrats leaders who blame everyone else now want to pressure (again) to lend to deadbeats.

Meanwhile Barry Hussein changes his story on the economy daily.

Are American that stupid? He asks, Well they elected me so yeah!

Babbit wrote:

Eliminate the 70% threshold but require 20% down or more from borrowers.

Eaxactly.
First time buyers need to start saving more money instead of blowing it on fancy cars and dining out 6 nights a week (7th night is leftovers!!)
How on Earth is permitting borrowers to put down 3.5% going to enable a long-term recovery of the housing market?
It's like trying to get into a $25 minimum poker game with $1. Why should the bank depositors take all the risk?
Those who cannot manage to save enough demonstrate poor long-term risk and are probably better off renting.

Todd wrote:

Nothing will improve until Lord Obama Jimmy Carter II is booted from office in 2012. Liberalism = failure. Always has, always will.

HA! Is this sarcasm? Do you really think that our troubles now were caused by Obama? The dire situation in which we find ourselves now began its downward spiral during the final year of the Bush administration and a republican controlled congress for most of the last 8 years as the foundation was being set for disaster. Deregulation under Bush and greed of very wealthy Bush supporters in large corporations are the culprits. Now it's up to Obama and a democratic majority to clean up the mess.

Putting first-time buyers into units with 3.5% down right before they lose their job is going to get the economy running again?

Great to see that the "intelligence of the market" is finding a new way to line up customers for the next wave of foreclosures. God forbid we learn a lesson about what happened when people bought places they couldn't realistically afford.

Of course, with unemployment at record levels, it's necessary to blame realistic qualification requirements rather than face the fact that too many units get built in a real-estate bubble.

Simple supply and demand...The fact that condos can't be sold without sub prime loan terms means 1) Housing is still quite overpriced relative to household income and 2) Resources were mis-allocated into building too many homes.

Thank the Fed and your Government for yet another unsustainable bubble.

Cheap-shot wrote:

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I agree. Lets bring back Bush and the Republicans back in 2012 so they can screw it all up again.

Really ?- I have one question for you- are we better off now under the incompetent ,total lack of experience Obama administration or during Bush administration ?

Cheap-shot wrote:

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I agree. Lets bring back Bush and the Republicans back in 2012 so they can screw it all up again.

Sheeple.

What's wrong with insisting more credit worthy people needed for selling condos or anything real estate? It is time to use damage control!

Edward wrote:

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Sheeple.

On all sides.

Any time you blame a party, you are absolving half the politicians.

To bad no more hand outs in the form of a home loan.

Don't worry guys the illustrious Frank and Weiner are on the job writing letters. I'm sure this will all be fine. Franks knows what he's doing and is a masterfull politician fully aware of how to fix things right up. Between Franks and Weiner we also have the dynamic dou Obama and Pelosi. They will pounce on any problem and bury it in freshly printed cash and attack it with their deadly tax manuever. We are all saved. Hooray.

Komrad Keith wrote:

Give those condos away to the homeless,

Better yet, why not round them up and treat them for mental disorders and put them to work doing any job they can handle to help pay for their treatment. If you just give them a condo they'll ruin it and the building it's in. Would you want to live there? Actually best solution is to round them all up and send them to San Francisco. They love the homeless there and have special laws to protect them. Plus it's never winter so they can sleep outside year round.

Martha wrote:

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HA! Is this sarcasm? Do you really think that our troubles now were caused by Obama? The dire situation in which we find ourselves now began its downward spiral during the final year of the Bush administration and a republican controlled congress for most of the last 8 years as the foundation was being set for disaster. Deregulation under Bush and greed of very wealthy Bush supporters in large corporations are the culprits. Now it's up to Obama and a democratic majority to clean up the mess.

no but it wasn't just Bush. In fact it was much more due to Barney f
Frank and his lack of good decision making and oversight of mortgage financing. He forced banks to have to create loose lending rules so they could meet their cra requirements. He's more to blame for this mess than Bush. Let's not forget that dems prevented anything from being able to pass in the legislature for the last two years of Bush. They are also to blame. The housing carket collapse killed consumer spending which was proping up the economy for years as people were treating their home equity like an ATM machine. You can't blame Bush for that. When the housing bubble burst so did the consumer spending which hurt businesses. Why was their a housing bubble? Due to bad policies written and implemented by democrats like Franks. Bush had little to do with this other than he should have fought people like Franks but gee I guess he was too busy fighting terrorism. By the way the worst examples of corporate greed and corruption happened during Clintons watch like Enron for example. Also the tech bust happened under him as well. If bush hadn't cut taxes the recession would have come a lot sooner. I for one thrived under Bush and as a result was able to give back to charities and buy a new house. Under Obama so far I'm doing nothing but being taxed to death by higher local state and eventully federal taxes thanks to his insane level of ludicrous spending on every pork project ever conceived. No wonder the rest of the world is trying to drop the dollar. When that happens you better hold on to your shorts. This is Obamas mess which is a lot worse than what it was when Bush left. At least his wife can afford a $6000 purse while touring Europe sans sleeves

These rules are not 'crimping sales', they are merely controlling the previous haphazard way of doing things. It is a CORRECTION.

dude wrote:

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Maybe the first time buyers need to save a little more before they jump into such a risky investment. So what's the plan when the condo drops 10% in value and these people are underwater? Probably a taxpayer subsidized re-finance. No thanks. Let's go with the 20% down requirement.
The government needs to get the taxpayer money out of the mortgage business and let the banks manage their own risk.

Once you have a FHA loan you could ALWAYS refinance because on a streamline FHA refinance you do NOT need an appraisal. You obviously don't know what you are talking about-- require 20% down on all condos and see what happens to values. Not good, my friend, not good.

All FHA loans will not be 3.5%. There will be buyers putting down 10%, 20% or more for 30 year fixed loans.

Some developers may decide to pay some of the closing costs and pick up title costs, etc. just to help sell out their buildings.

The developers who had pre-sales may lose a lot of sales through attrition due to buyers losing their jobs. If you are told the bldg is 45% sold think about 30% for the real number. Lot of fake sales show in the sales centers to make the buying public believe the development is doing well.

Anything that can legally be done to attract buyers will be done - rent with option to purchase so the tenant can get a a monthly deposit from his rent to be put toward a down payment - Sell with a buy-back clause at the end of a year - sales like this can't be posted as earnings until a year later but meanwhile there is a sale adding to the FNMA and Freddie building sale % requirement. Many things from the past - 1970's - 1980's recessionary sale methods can be dusted off, tweaked and put into use again.