PatriotsReign

Day after day, week after week, I am simply amazed at the level of stupidy in this country.

Some "Experts" are now supporting EXTENDING and expanding Obama's Home Affordable Refinance Program by not asking for income verification or investigating if candidates can actually afford the homes they're living in or have their homes appraised.

I'd love to read a single logical argument as to why this makes any sense at all. The more we slow down the process of real estate bottoming out, the longer we'll be in this depression/recession.

"Zandi made additional suggestions, including proposing that Fannie and Freddie could forgo borrower income verification and detailed home appraisals to keep costs down.

As of June, roughly 840,000 borrowers have refinanced their mortgages through HARP. However, RealtyTrac reports that about 16 million of the 40 million U.S. mortgages are underwater.

According to CoreLogic, the number of mortgages that are 25% or more underwater is 4.6 million and the number that is 50% or more is 2.3 million.
"

Experts back expanding Obama mortgage refi effort - MarketWatch

Yeah, let's allow unqualified borrowers to refinance mortgages on homes that should not be appraised...makes sense, huh?

I guess doing what we did to get us in this mess is the right path to get us out of it!

I just pray that we still have some politicians who upon hearing this proposal, asks the question,

"Are you retarded?"

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"No one walking this earth knows what is truly righteous"

The Brandon Five

Because owning a home is a "right" (just like a college education, health care, etc...). That way people don't actually need a "job". He really does have a plan to address unemployment!

PatriotsReign

It seems whenever I post threads like this, it gets few comments because people prefer to...

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"No one walking this earth knows what is truly righteous"

Mrs.PatsFanInVa

Good of you to cut out the explanation, PR.

“HARP candidates have already proven their ability to pay by making timely payments throughout the tough economy,” he said.

Apparently these are people who are not defaulted or even behind on their loans - only people whose homes have lost value.

Like I said - and like Zandi said - and the part you left out - these are not necessarily "unqualified borrowers."

PatriotsReign

C'mon MrsP...it doesn't matter if someone hasn't missed a payment, they still need to have their income source verified. After all, people who weren't qualified to get mortgages in the first place, got them because of liar-loans.

We WANT banks to verify the income of borrowers without exception. Unless you want to bail out Fanny & Freddie once again.

Bottom-line is, either your income qualifies one for a mortgage or re-fi, or it doesn't...but everyone needs to be verified. The fact that someone hasn't missed a payment is irrelevant.

Common sense dictates (and history proves), losses accelerate as you loosen standards. Forgo income verification and ignore credit scores and losses will soar....AGAIN.

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"No one walking this earth knows what is truly righteous"

Charlotte Pats Fan

In summation these Experts want to ignore income verifcation, ignore the market value of these properties and let the GSE twins gaurantee these loans with taxpayer money? Ya, that'll work..... Insanity..... gee I wonder whose going to take the losses. The Lenders or the Taxpayer?

chicowalker

I think you're overstating your position, PR. Are income verification and credit scores important? Sure. But saying that one's track record of payment is irrelevant? No way you can support that, PR.

They're all factors that any lender should look at.

Drewski

Doesn't one's credit score take into account missed/late payments? I dont pretend to be an expert on how a person's credit score is calculated, but I do know payment track records do go into the calculation.

That being said, I'm of the opinion that it should be very difficult to be approved for a MTG/Re-fi. After all isn't the "easiness" of getting a MTG regardless of a person's ability to pay said MTG one of the many things that has brought our economy to its knees?

My wife and I are currently renters, but actively looking at buying our first home. It is frustrating seeing the regulations/rules for getting approved for a MTG. My credit score is nearly perfect and I pull in a great salary for my age, and we have next to no debt, but we lack the big down payment. My bro-in-law is a MTG officer for a local bank in RI and has said regardless of my 815 credit score, and what I could afford payment wise (using the 24-36% of gross income calculation I learned in college), I am not attractive at the amounts it would take to buy a nice first house simply because in todays world, at 3-4% down, I am not invested in my home, and what do I have to lose if I cant pay and just walk away from it?

So we rent, putting away each month in hopes that sometime in the near future, whether here is MA or someplace much cheaper (home wise) to reach the American Dream (not right).

chicowalker

Credit scores should include mortgage payments.

My point, though, is that saying they shouldn't be looked at is silly. Credit scores can also be hurt by other late payments, disputes with creditors, etc. And they can be hurt by things that don't make sense intuitively or reflect on ability or willingness to pay, like shutting down credit lines.

Personally, I have a good but not great credit score -- because I forget about bills when I don't pay them immediately (happens far less with technology today enabling online and/or automated payments). However, I don't think I've ever missed any kind of important payment. (Let's not kid ourselves -- many lenders rely on people missing payments.)

Also, people who are on the edge might make their mortgage payment, car payment, etc. a priority beyond the overdue credit card payment. Clearly, that's not an ideal risk for a lender, but it's not something to be dismissed as irrelevant, either.

Drewski

chico - agree with all you have stated above. I guess my point was more of the credit scores and income "most" times indicate a persons ability to pay (income) and their willingness (credit scores). I look at them like SATs or school grades. Do SATs or grades show what type of person you are or will be, or what your "real world" abilities are perfectly? Not really, but they are the accepted "best way" to compare students across the board. Sure sometimes a college will take a "risk" on a marginal student knowing that maybe the opportunity to be great will spark the student. What do they have to lose if the student fails? Nothing, they kick em out.

When it comes to MTGs, especially ones backed/offered by the feds, risky investments should be mitigated because we have seen the effects that people failing to pay their MTG/ buying more than they can afford etc can have on our economy. The Feds have a lot more to lose than the college in the example above, and when the feds loses, we all do. Its one thing when a company offers a "risky" MTG because they are making a business decision and they are free to do so. Its quite another when Fed agencies make risky offers that cost all of us.

I agree with you that some of the things which can impact a score are crazy - ie having your credit checked frequently will drop it (why?).