Please explain this logic on a new housing proposal

The White House is proposing another plan to get people into homes for just $1000 down. Sound familiar? Kind of what got us into this housing mess in the first place? Granted you have to have a higher score than before. I think they are talking about 680. But they are finding out that people with higher scores are defaulting as quickly as those with lower scores. This is almost a 100% loan to value loans again. Are you kidding me?

So who is this going to be done through? Fannie Mae. One of the companies that they made exempt under this latest banking regualtion bill they passed. Now it is making sense. Also, Fannie Mae just asked for $1.5 billion in bailout money. So they can't make it now, but they are suppose to loan out money to risky home deals again. Isn't this what Clinton signed in 1999 that blew up in our face in 2007 and caused one of the worst recessions in history? So if it doesn't work once and almost bankrupts the country, why don't we try it again? :bash

So where is the outrage for the hypocrisy of this? They claimed for years that they wanted to stop this kind of terrible lending and now they are doing it again.

http://slatest.slate.com/id/2263097/?v=1

Fannie Mae Is Offering $1,000-Down Mortgages Again


Back so soon? Less than three years after the housing market tanked, it's once again possible to get a 30-year, fixed-rate mortgage with virtually nothing down. "Stop wasting rent check after rent check and start building equity in your own home," one ad reads. "With only $1,000 down, affordable monthly payments and no private mortgage insurance required, the dream is closer than you think." The Washington Indpendent's Annie Lowery reports that this too-good-to-be-true deal isn't a scheme perpetrated by a private mortgage company pushing risky loans on cash-strapped buyers—it's part of a government pilot program. "It is not a teaser or a trick," Lowery says. "The advertisement references a program initiated by the National Council of State Housing Agencies and Fannie Mae, the taxpayer-backed, government-sponsored enterprise that buys up mortgages from lending banks." Commentators are stunned. "Can't imagine what could go wrong," Matt Yglesias sighs. "I just didn't expect this level of denial to re-emerge so quickly." Megan McArdle refers to the program as "housing insanity." "The government is less worried about protecting itself from default than protecting itself from voters who want to buy a home at cheap rates," McArdle writes. "It's true that this particular program is small—I don't think the economy is going to be brought to its knees by several hundred houses. The important thing, however, is that this is how the government thinks about housing."

They use to say these loans were reckless and that these loans are what crushed the economy. So now that the government has control of lending and banks, they are saying, let us give the same thing a try. Idiots!

I guess they are thinking they have to fill up all those empty, foreclosed homes somehow? I guess they could just let squatters move in instead. Or rent them out for 10 cents on the dollar. I am old enough to remember when the commercial real estate glut here in Denver after the "oil bust" that you could rent an office in say the Tech Center for no rent for six months, then something like $3 a square foot. They just wanted someone in the space to keep the spiders and rats from getting too bold, I guess.

Yahoo lets do it again!. Same reply in early 1990's bailouts and the early
1980's bailouts. All with taxpayer money.
FNMA? speaking of. Recent(last couple of months) FNMA all happy
after using taxpayer money to buy into a Cap & Trade partnership.
What that(Cap&trade) has to do with home lending I do no know.
Who will get the profits.

I hate to burst your bubble, but people have been buying homes all along with no money down. They get the seller to pay their closing costs and the down payment. Seen it all too many times. Often times, the contract price gets bumped above asking price to cover these costs, so the seller doesn't loose as much in the transaction.

Silent Lucidity wrote: I hate to burst your bubble, but people have been buying homes all along with no money down. They get the seller to pay their closing costs and the down payment. Seen it all too many times. Often times, the contract price gets bumped above asking price to cover these costs, so the seller doesn't loose as much in the transaction.

I know this. I was in the lending and real estate industry for 11 years. After this housing crash they made it so you needed a minimum of 10% down and most of the time 20% down. Now we are back to giving homes to anyone who has a job and good credit again. They have nothing invested in the home so if they can't afford it they just let it go back to the banks again with nothing lost. Great plan. When did we try that before? Oh yes. 1999 when Clinton deregulated the lending industry adn housing markets. And look where we are today, with more houses in forclosure than ever in history and banks failing and closing up every week. We are doing exactly what Obama said he wanted to stop and regulate. Why is he doing the exact same thing that failed before?

The Viking wrote:

Silent Lucidity wrote: I hate to burst your bubble, but people have been buying homes all along with no money down. They get the seller to pay their closing costs and the down payment. Seen it all too many times. Often times, the contract price gets bumped above asking price to cover these costs, so the seller doesn't loose as much in the transaction.

I know this. I was in the lending and real estate industry for 11 years. After this housing crash they made it so you needed a minimum of 10% down and most of the time 20% down. Now we are back to giving homes to anyone who has a job and good credit again. They have nothing invested in the home so if they can't afford it they just let it go back to the banks again with nothing lost. Great plan. When did we try that before? Oh yes. 1999 when Clinton deregulated the lending industry adn housing markets. And look where we are today, with more houses in forclosure than ever in history and banks failing and closing up every week. We are doing exactly what Obama said he wanted to stop and regulate. Why is he doing the exact same thing that failed before?

My point was, that even since this most recent housing crash people were able to buy homes with less than 10% down and they didn't necessarily need the funds. As you know, FNMA doesn't back every loan. I'm not saying I agree with it, but I'm saying it is happening.

Silent Lucidity wrote:

The Viking wrote:

Silent Lucidity wrote: I hate to burst your bubble, but people have been buying homes all along with no money down. They get the seller to pay their closing costs and the down payment. Seen it all too many times. Often times, the contract price gets bumped above asking price to cover these costs, so the seller doesn't loose as much in the transaction.

I know this. I was in the lending and real estate industry for 11 years. After this housing crash they made it so you needed a minimum of 10% down and most of the time 20% down. Now we are back to giving homes to anyone who has a job and good credit again. They have nothing invested in the home so if they can't afford it they just let it go back to the banks again with nothing lost. Great plan. When did we try that before? Oh yes. 1999 when Clinton deregulated the lending industry adn housing markets. And look where we are today, with more houses in forclosure than ever in history and banks failing and closing up every week. We are doing exactly what Obama said he wanted to stop and regulate. Why is he doing the exact same thing that failed before?

My point was, that even since this most recent housing crash people were able to buy homes with less than 10% down and they didn't necessarily need the funds. As you know, FNMA doesn't back every loan. I'm not saying I agree with it, but I'm saying it is happening.

Actually I think the figure is about 90% that they back. They should not have that much control. And why were they exempt from the last round of regulations that all the banks are now under?

I'm seeing that things didn't change at all - a lot of hype, shouting, yelling, stomping about, but in the end, nothing actually changed.

As for the squatters idea - I'm all for it. Plenty of families are homeless right now, and they're not drug addicts, nutjobs, crimminals - they're just normal families. You get them in, they pay the property tax, they pay a minimum amount and after 10 years, they own the place. I'd rather have this then a new meth lab or crack house next door, know what I'm saying?

The White House is proposing another plan to get people into homes for just $1000 down.

I don't know..This sounds pretty good to me. Anyone know how I can sign up? And by the way does anyone have a $1000 I can borrow? :Whistle