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      05-10-2011, 05:39 PM   #23
NBRider88
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Originally Posted by MediaArtist View Post
FHA Delinquency Rate 2010: 9.04%
Subprime Delinquency Rate 1997 (before Subprime crisis): 9.67%

This is why no one who buys a house should listen to someone who makes money from underwriting loan products. They don't have your best interest at heart. They will tell you that FHA loans are great even though they are sub-prime products under another name.

Just because you help put people into credit doom at your daddy's company doesn't mean the loan products you're helping to underwrite aren't bogus subprime garbage.
HAHA! Look at you getting stuck in a corner. Making assumptions and now personal attacks...I thought you said "I won't get into immaturity and trade personal insults with you" You had to stoop low cause you have no idea what you're talking about. You see one thing on some web-site and run with it. Whatever makes you sleep at night. There are people who care, there are people who have the borrowers best interest in mind; yes true story. I have plenty of facts I can post links to as well, but this debate would go nowhere quick as you have your blinders on.

IMO and others it looks like (tags below) quite simply, you're wrong.


Obviously this conversation is over as you have nothing of value to put forth.

EDIT: Nice tag, nbrider88s dad = crook? Real mature. Fact is, my dad is dead but thanks for your insight cause you are obviously so enlightened. You're a joke.
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      05-10-2011, 05:59 PM   #24
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Quote:
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Obviously this conversation is over as you have nothing of value to put forth.
I think someone is trying to stir up trouble with the tags. Don't take it personally. I don't.

As for our conversation, what do you mean I have nothing of value to put forth? I just proved with recorded statistics that FHA loans of 2010 have delinquency rates that are exactly like subprime historical delinquency rates. You said you were a credit professional with underwriting experience, and you called the FHA loan a "solid" loan product. How can you reconcile these facts?
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Last edited by MediaArtist; 05-10-2011 at 06:07 PM.
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      05-10-2011, 06:17 PM   #25
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Originally Posted by MediaArtist View Post
I think someone is trying to stir up trouble with the tags. Don't take it personally.

As for our conversation, what do you mean I have nothing of value to put forth? I just proved with recorded statistics that FHA loans of 2010 have delinquency rates that are exactly like subprime historical delinquency rates. You said you were a credit professional with underwriting experience, and you called the FHA loan a "solid" loan product. How can you reconcile these facts?
"About 9.1 percent of FHA borrowers had missed at least three payments as of December, up from 6.5 percent a year ago, the agency's figures show. "

An article you linked earlier. That's a helluva jump, don't you think that was contributed to the whole market crash? People lost jobs, got hours taken away etc...they were unable to pay their bills. Of course the numbers jump is so much more significant due to the fact the portfolio (amount) of FHA loans is tiny and insignificant compared to Prime loans. Less people = bigger highs & lows. And where does this delinquency number come from? Is it a certain state, or the country as a whole? Each county delinquency rates range....some have 3% total delinquency, some have 10%...it is all relative.

FHA does not make loans, they insure loans. The banks are the one who have their own personal guidelines and fund them. If the borrower shows significant ability to repay the loan, why is that not solid enough for you? It obviously is enough for them and they are raking in the money from it...
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      05-10-2011, 06:24 PM   #26
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Originally Posted by NBRider88 View Post

An article you linked earlier. That's a helluva jump, don't you think that was contributed to the whole market crash? People lost jobs, got hours taken away etc...they were unable to pay their bills.
That's exactly why people shouldn't be buying more house than they can afford. Subprime, Alt-A, and Prime were invented for a reason. If you lose a job, or have to go part time, your housing cost shouldn't cripple your entire life. Spending 43% of your net income on debt is one way to get there.

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It obviously is enough for them and they are raking in the money from it...
All basic knowledge. The banks have no skin in the game. If a person defaults on a FHA loan, they aren't on the hook, FHA is. Sure they rake money in from fees, but ultimately FHA is on the hook for the loan if it goes into default.

Quote:
If the borrower shows significant ability to repay the loan, why is that not solid enough for you?
"People lost jobs, got hours taken away etc...they were unable to pay their bills." - NBRider88

Just because someone can pay this month, doesn't guarentee they can next month. Long history of employment and good credit history is a good indicator of someone's staying power.

If someone only has 3.5% to put down, it shows that they either don't have a very long employment history, or they aren't saving much of their money. Either way, 3.5% isn't much better than the Zero down loans from the subprime mortgage crisis.

20% down should be the minimum for anyone to purchase a house. Anything else is just risky, creative, financing.
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      05-10-2011, 06:47 PM   #27
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[quote=MediaArtist]That's exactly why people shouldn't be buying more house than they can afford. Subprime, Alt-A, and Prime were invented for a reason. If you lose a job, or have to go part time, your housing cost shouldn't cripple your entire life. Spending 43% of your net income on debt is one way to get there.

Prime loans, fannie mae etc are at 43% back-end as well so?....

All basic knowledge. The banks have no skin in the game. If a person defaults on a FHA loan, they aren't on the hook, FHA is. Sure they rake money in from fees, but ultimately FHA is on the hook for the loan if it goes into default.

Yes, correct. Though don't you think if FHA wasn't making an overall profit it would still provide FHA loans especially given it's current default rate? I doubt it.


"People lost jobs, got hours taken away etc...they were unable to pay their bills." - NBRider88

Just because someone can pay this month, doesn't guarentee they can next month. Long history of employment and good credit history is a good indicator of someone's staying power.[/QUOTE=MediaArtist;9570706]

As well as ~6+ months reserves PiTi. What happens after ~6 months of no job? No matter what loan you are in, if you don't have the reserves, and you lose your job, you're screwed. All lenders want to see employment history and "good" credit as well as reserves. There is never a guarantee the borrower will be able to pay off the loan, all you can do is qualify them and show the ability to repay.


If someone only has 3.5% to put down, it shows that they either don't have a very long employment history, or they aren't saving much of their money. Either way, 3.5% isn't much better than the Zero down loans from the subprime mortgage crisis.

20% down should be the minimum for anyone to purchase a house. Anything else is just risky, creative, financing.

That's 100% personal opinion. So nothing to refute.



I will agree to disagree. No point to try and pound how we feel 10 different ways. We obviously have different feelings towards this topic.
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      05-10-2011, 06:52 PM   #28
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Quote:
Originally Posted by MediaArtist View Post
20% down should be the minimum for anyone to purchase a house. Anything else is just risky, creative, financing.
Do that and no one is buying your house. The reality is that most people in this country don't even have 3 months of saving for emergencies let a lone 20% on a 200k home (which in the area I live in, will get you a 600sq ft 1bd condo if your lucky)

But if that were to happen, the value of your place and everyone else's home would collapse to the point where "regular folks" could afford a 20% down payment.

Back during the housing boom, lenders were offering me ridiculous non-fha loans which I could never truly afford. Nearly 60k over what I should have been offered to afford overpriced condos. Crazy. Luckily I just waited.

FHA at the time offered no where near that amount.
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      05-10-2011, 06:57 PM   #29
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Quote:
Prime loans, fannie mae etc are at 43% back-end as well so?....
Fannie Mae is not exactly one of the best examples of an institution to use when defending underwriting standards. Have you read the news in the past 3-4 years?

Quote:
Though don't you think if FHA wasn't making an overall profit it would still provide FHA loans especially given it's current default rate? I doubt it.
You assume too much. David Stevens admitted that FHA capital reserves were dangerously low in 2010, and is taking steps to bolster its reserves by increasing insurance premiums. Straight from HUDs website.
http://portal.hud.gov/hudportal/HUD?...1/HUDNo.11-013

Quote:
As well as ~6+ months reserves PiTi. What happens after ~6 months of no job? No matter what loan you are in, if you don't have the reserves, and you lose your job, you're screwed. All lenders want to see employment history and "good" credit as well as reserves. There is never a guarantee the borrower will be able to pay off the loan, all you can do is qualify them and show the ability to repay.
But people with only 3.5% in the game default at a much higher rate than people with 50% in the game. The more money you have in, the less likely you are to default, this is unquestionably, statistically proven.

Quote:
I will agree to disagree. No point to try and pound how we feel 10 different ways. We obviously have different feelings towards this topic.
We can have different feelings, but facts are facts.
- FHA has a bad default rate
- FHA as an institution has low capital reserves, they aren't making money.

It's not a solid loan product no matter how you paint it.
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      05-10-2011, 06:59 PM   #30
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Quote:
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Do that and no one is buying your house. The reality is that most people in this country don't even have 3 months of saving for emergencies let a lone 20% on a 200k home (which in the area I live in, will get you a 600sq ft 1bd condo if your lucky)

But if that were to happen, the value of your place and everyone else's home would collapse to the point where "regular folks" could afford a 20% down payment.
This should happen.

Not everyone should be a home owner.

Housing is too bubbly as it is and prices should drop. Right now it's a huge drag on the economy. People don't realize that things will get a lot better when housing becomes more affordable and in line with historical norms.
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