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Strategist
2016 Feb 12, 7:36pm
Again, look what you're resorting to calling tight?
A non traditional loan aspect
This is why the tight lending crew will be wrong for another century,
We don't lend debt to non capacity owners in general ever again, it's never ever coming back
WTF? A $50K loan at 2.99% is $125.00 per month. If she can't qualify for more on a free and clear property, with 800 FICO, then something in the system is screwed up. What is it Logan? :)
Let's say you're a family of 4. Parents are in late thirties. Have 1 million in savings. And 150K per year income.
Old House in Montclair 3/2, Oakland costs about 900K. Crime is high. Schools shitty.
Would you drop your life savings on this house?
Why the fuck would you even want to live there.
You realize that life is short and get the hell out of there.
Life is short. Don't buy these shitty rotten, old houses ladies and gentlemen. Just my 2 c.
Strategist
2016 Feb 12, 7:38pm
We don't lend debt to non capacity owners
What exactly is a "non capacity owner"?
The bottom 99% from the looks of it.
_
2016 Feb 12, 7:40pm
What exactly is a "non capacity owner"?
She doesn't make enough money, period
IF she can't get a 43% debt to income ratio, then she is a high level risk exception loan
These are very basic liberal lending standards and she still can't qualify with them
She isn't ready at 24 to own a home
_
2016 Feb 12, 7:42pm
Think about it this way
All you need
Is a
620 Fico
3.5% down
43% Debt to income ratio
If you can't manage that you have no business buying a home what so ever
Strategist
2016 Feb 12, 7:43pm
What exactly is a "non capacity owner"?
She doesn't make enough money, period
IF she can't get a 43% debt to income ratio, then she is a high level risk exception loan
These are very basic liberal lending standards and she still can't qualify with them
She isn't ready at 24 to own a home
She is at 11% LTV with the new loan.
15%Debt ratio with the new loan.
800 FICO
Next excuse.......?????
_
2016 Feb 12, 7:44pm
Poor cash flow Americans don't buy homes anymore, thank god for that.
The reason we have the best home buyer profile ever on record, is because we took out all the junk from the market place
_
2016 Feb 12, 7:47pm
Next excuse.......?????
Rubbish
See you guys all hide behind your fake names, this act works on these sites, but it doesn't work on people who don't hide behind fake names
just_passing_through
How is life is Arizona, your sentence structure gave you away again
Strategist
2016 Feb 12, 7:47pm
Poor cash flow Americans don't buy homes anymore, thank god for that.
$125 per month with $6,000 monthly income is not poor cash flow. She has $30,000 to $40,000 in savings.
Next excuse....?????
Strategist
2016 Feb 12, 7:49pm
Next excuse.......?????
Rubbish
See you guys all hide behind your fake names, this act works on these sites, but it doesn't work on people who don't hide behind fake names
The numbers are real. :) :) :)
You ran out of excuses didn't you?
_
2016 Feb 12, 7:49pm
$125 per month with $6,000 monthly income is not poor cash flow. She has $30,000 to $40,000 in savings.
Next excuse....?????
I don't believe you, unless she doesn't have 2 year history at work
Strategist
2016 Feb 12, 7:50pm
$125 per month with $6,000 monthly income is not poor cash flow. She has $30,000 to $40,000 in savings.
Next excuse....?????I don't believe you, unless she doesn't have 2 year history at work
Nope. It's true.
_
2016 Feb 12, 7:51pm
Your entire tight lending thesis is now based on your 24 year daughter can't get a home loan
We did over 4 million loans last year as a country
Lending isn't tight at all, Americans buy homes ever day...
_
2016 Feb 12, 7:52pm
Nope. It's true.
Don't believe you at all now, I can get her DU approved in 7 mins with that profile,
Strategist
2016 Feb 12, 7:56pm
Your entire tight lending thesis is now based on your 24 year daughter can't get a home loan
We did over 4 million loans last year as a country
Lending isn't tight at all, Americans buy homes ever day...
Apparently not enough get loans to buy homes. She had parents who could help, but not all parents can. Lets get back to the year 2,000 underwriting standards. Bankers, home builders, and Yellen, all say lending is tight. When government loans are the only game in town, you know it must be true.
_
2016 Feb 12, 7:57pm
In fact lets put it to the test
Send me her loan profile and I will get her a DU approval
Because if your 24 year is the only case you have that Americans can't get loans...
Then let me put this false thesis to the test
Strategist
2016 Feb 12, 8:00pm
In fact lets put it to the test
Send me her loan profile and I will get her a DU approval
Because if your 24 year is the only case you have that Americans can't get loans...
Then let me put this false thesis to the test
I need to maintain my privacy. She was flatly rejected by Wells Fargo, and this bank cut her loan to $50K for the same reason.....Not enough credit history even with an 800 FICO.
_
2016 Feb 12, 8:06pm
Not enough credit history even with an 800 FICO.
Are you saying she has no car loan? No credit cards?
Maga_Chaos_Monkey
2016 Feb 12, 8:08pm
See you guys all hide behind your fake names, this act works on these sites, but it doesn't work on people who don't hide behind fake names
just_passing_through
How is life is Arizona, your sentence structure gave you away again
Whatever dude... Only name I've ever had on patnet is just_passing_through. Just curious WTF a "non capacity owner" was because it sounded like horse shit and it turned out nobody except for you has used such a phrase on the interwebs.
Why not just say a bad credit risk?
Strategist
2016 Feb 12, 8:12pm
Not enough credit history even with an 800 FICO.
Are you saying she has no car loan? No credit cards?
She has 4 credit cards. The first one dating back to age 18. Nothing else.
_
2016 Feb 12, 8:14pm
"non capacity owner"
Capacity owner of debt
Is that they have the ability to pay (CFPB) mandate for legal purposes that the banks can't be sued if they meet the core guidelines
Non Capacity owner
Doesn't have the ability to pay
These basic 2
1. Verify Income
2. No more exotic debt structure
- Interest only loans
- 40 year amortization
These are just conventional loans
FHA on the other hand are exempt from CFPB
So they can lend back to their core standards without DPA ( Down payment assistance) loans
If you can't buy a home with a FHA loan
You have No Business Buying a Home
_
2016 Feb 12, 8:16pm
The first one dating back to age 18. Nothing else
Get her a car loan ASAP
Hence why kids under 25 don't buy homes they have no credit establishment history
20 years here never have seen anyone under 25 even apply for a home loan even with the Housing madness with all the fake demand
_
2016 Feb 12, 8:17pm
Why not just say a bad credit risk?
credit risk has nothing to do with the CFPB qualified mortgage mandate
_
2016 Feb 12, 8:19pm
Below are the Ability to Repay Determinations:
1. Current or reasonably expected income or assets; income capacity and showing liquid assets to buy a home.
2. Current employment status. (The person should have a job and show stability in the same line of work for a certain length of time).
3. Monthly payment on the covered transaction.
4. Monthly payment on any simultaneous loan.
5. Monthly payment for mortgage related items.
6. Current debt obligations, alimony and child support.
7. Monthly debt-to-income ratio or residual income .
8. Credit history (history or credit that prove timely payments have been made and not too much revolving credit card debt is a good thing)
All of the above determinations make good sense, and most are geared at ensuring a healthy debt to income ratio.
Further, below are additional points with which I agree and firmly believe should never be changed.
1. No interest only loans or Negative amortization loans. This is a plus because it eliminates any uncertainty to surprises over the long-term cost of shelter for the borrower.
2. No more loans longer than 30 years. >
3. Stated incomes loans are a thing of the past.
4. No loans will be done with a DTI over 43. This is my favorite item. In fact, this rule should be mandated for the FHA tomorrow.
Maga_Chaos_Monkey
2016 Feb 12, 8:23pm
credit risk has nothing to do with the CFPB qualified mortgage mandate
Very interesting - thanks!
_
2016 Feb 12, 8:24pm
So if loans are to be done over 43% debt to Income ratio ( they'r) exception loans which can happen up to 50% debt to income ratio
Let me repeat myself
50% debt to income ratio for exception loans
Which means that ....
Loans with over 50% debt to income ratio are pretty much out of the system with a few exception high end loan products
phaster
2016 Feb 13, 6:30pm
If you have a pension you probably have a government job, and those are very stable. It's not a bad time to buy I think if you are in a stable place. In our area (LA) prices dropped lately.
Of course you should consider all the decisions related to buying a house. It is never cheap to own, renting in CA is generally much cheaper.
The reason we aren't going to see a huge crash like in 2007 again is that the buyer profile is too strong from this last cycle. 30% or more cash buyers for the last 5 years.
Since 2008 because banks have generally tightened lending standards, so I don't think housing is going to be the cause of the next economic downturn, actually FWIW think there might be problem(s) w/ "local" public pensions in the SD area (and else where) GIVEN news reports, etc...
City pensioners get '13th check' bonus
More than $6.1 million has been distributed to retired San Diego city employees in the form of a "13th check" — beyond their usual 12 monthly payments — making this year's holiday bonus the largest such payout in the history of the three-decade-old practice.
But it's become a source of conflict as the city's pension system faces a $2 billion shortfall in promised payments, which remains a taxpayer burden and has led to budget crises in the past at City Hall.
http://www.sandiegouniontribune.com/news/2015/dec/18/13th-check/
AND
Handbook of Frauds, Scams, and Swindles: Failures of Ethics in Leadership (edited by Serge Matulich, David M. Currie)
Though SDCERS investments were earning well above the 8 percent rate of return estimated by the system actuaries, under normal conditions investments surpluses are required to make up for below-average returns in other years to achieve the average rate of return. Therefore, unless the actuaries' estimates are grossly incorrect, in the long run true "surplus earnings" are impossible. The use of surplus earnings for the purposes other than maintaining the pension system, such as to expand existing benefits should be viewed as a loan from the system THAT WILL REQUIRE REPAYMENT IN THE FUTURE.
page 286
the key to understand why this is a BIG problem is actually no more complicated than a middle school math concept of "compound interest" which applies to real world every-day money managment
if an individual has a mortgage, then perhaps you might have heard that you can pay off a loan much faster, by "annually" making an extra -- 13th -- mortgage payment,... what an extra mortgage payment does is directly reduces the principal balance on the loan by the amount of the payment (and the observed effect is exponentially decreasing the payback period)
anyone able to grasp the power/implications of "compound interest" then reading the published reports should be very disturbed at the mis-management/incompetence/corruption since the PRIMARY CAUSE as to why the "magnitude" of the SD public pension "unfunded" problem exists is due to a simple math concept that was suppose to be learned in middle school...
as-reported for the past three decades the "surplus earnings" (aka 13th payment) was diverted to pensioner(s) every holiday season INSTEAD OF being used for the original goal of trying to make sure the long term average return of the portfolio was achieved (about about 8% as per actuaries' design-estimates)
if anyone is able to think critically about "compound interest" then they will see that making an annual extra mortgage payment and making an extra payment to pensioner(s) every holiday are two side of the same coin; one side allows a mortgage debt to be paid "down" much sooner, the other side makes the debt to pile "up" exponentially over decades!
Because the math indicates of the SD pension system as currently structured/operated, that the un-funded DEBT issue will basically ALWAYS grow, there might be a investment opportunity to short muni bonds!? (which might cause problem(s) for the economy??)
http://piggington.com/how_will_unfunded_pensions_affect_economy?page=5#comment-262866
[for reference] In The Big Short there is a scene where the economist (Richard Thaler) and the singer (Selena Gomez) are playing black jack and explain to the movie audience, depending upon the tranche the swap payout ratio was 20:1 to 200:1 on a CDO
The over all idea is lets say it were possible to take out "swaps" on bonds issued to cover the face value of 2 billion in unfunded pensions, so if the muni bonds failed the payout using numbers discussed in the movie would be 40 to 400 BILLION (in just the SD area ALONE IN THIS EXAMPLE which would have to be somehow accounted for)
interesting stuff to ponder eh...
FortWayne
2016 Feb 14, 2:53pm
if anyone is able to think critically about "compound interest" then they will see that making an annual extra mortgage payment and making an extra payment to pensioner(s) every holiday are two side of the same coin; one side allows a mortgage debt to be paid "down" much sooner, the other side makes the debt to pile "up" exponentially over decades!
Because the math indicates of the SD pension system as currently structured/operated, that the un-funded DEBT issue will basically ALWAYS grow, there might be a investment opportunity to short muni bonds!? (which might cause problem(s) for the economy??)
I know what you mean. Politicians generally are very generous with other peoples money to buy votes, what happens later when money runs out, they seldom care for.
phaster
2016 Feb 21, 2:13pm
Politicians generally are very generous with other peoples money to buy votes, what happens later when money runs out, they seldom care for.
actually IMHO politicians don't CARE or for that matter THINK very far past the next election cycle
just like in the movie the big short where we see the "short" traders (in particular the steve carell character - mark baum) have the correct economic forecast, while the majority (99.9% of the "swap" conventioneers in the las vegas scene), don't see defaults going above 5% and causing any economic problems
in other words politicians and the "swap" conventioneers (in the big short) are motivated by the same thing(s) (i.e. money and power) and share the same weaknesses characteristics of being greedy-prideful-idiots! so its impossible for TPTB to know what is going to happen later on down the line...
as evidence (of my big-short pension thesis in San Diego) according to TPTB (in a press release...)
Financial Outlook Shows San Diego's Revenue Will Grow
Revenues to the city of San Diego are projected to "modestly improve" over the next five fiscal years, while expenses will continue to rise, according to a financial outlook to be delivered Thursday to the City Council's Budget Committee.
The five-year outlook, released annually in November by the mayor's financial staff, projects steadily increasing general fund surpluses through Fiscal Year 2021.
The anticipated surpluses begin at $200,000 for the next fiscal year, and grow in subsequent years to $7.9 million, $25.1 million, $46.4 million, and $73.7 million.
THE PROJECTIONS DON'T INCLUDE FACTORS THAT OCCASIONALLY POP UP, like increases in contributions to the employee pension system.
http://timesofsandiego.com/politics/2015/11/18/financial-outlook-shows-san-diegos-revenue-will-grow/
BUT I worry about "details" of TPTB projections since, there is a NEW accounting rule that is suppose prevent
accounting/financial "shenanigans" in government WRT public pensions...
PUBLIC "Pension liabilities must be included on the balance sheets of the agencies responsible for funding their employees' pensions. Until now liabilities have been buried in arcane footnotes that few read and even fewer understood"
http://articles.latimes.com/2014/apr/09/opinion/la-oe-fritz-pension-liability-california-20140410
Let's say you're a family of 4. Parents are in late thirties. Have 1 million in savings. And 150K per year income.
Old House in Montclair 3/2, Oakland costs about 900K. Crime is high. Schools shitty.
Would you drop your life savings on this house?
Why the fuck would you even want to live there.
You realize that life is short and get the hell out of there.
Life is short. Don't buy these shitty rotten, old houses ladies and gentlemen. Just my 2 c.
Agreed. I'm with the steel-worker on this one. Either move somewhere were prices are still sane or keep renting. $900, sweet beauty. You can amass a fortune on the side over the years with paying that little in rent.
Tenpoundbass
2016 Feb 22, 6:33am
I make around $120K and wouldn't dream of a mortgage over $200K.
You're 26 now, ask your self if you still see your self making 100K 30 years from now. Is there anyway your industry could dry up between now and then and do you posses comparable skills that you could continue making 3 figures if for what ever reason your current job type dries up.
Sure you might think you can easily swing the mortgage on a 400K spread.
The problem is those mortgage payments wont stay constant. Property taxes and insurance are a moving target from year to year.
If you get some greedy creeps in the State legislature to write a love poem to the insurance industry like we have here in Florida. You can end up going from 3K a year to 10K extortion that they tried to run on me this year.
We are in an 11 year long hurricane drought, and yet this year. The lobbyist are going for broke, you going broke that is.
They send out home inspectors with a new doctored up list of electrical panels that they know are in 50% of the South Florida homes, and attacking people who have yet to jump in on the Hurricane impact window scam(you can never get a straight honest price list from anyone. You're at the whim of the 5 salesmen that these companies send out. You can't buy factory direct and install them your self. And they start at $30,000. If the industry wasn't the way it is. You could probably get them done for less than $7K But Greed is now Florida's number one growth industry. The State of Florida is offering these grants to have that done, where they just tack onto your tax bill what it cost to do the "Greenovation" to your house. Plus you get the higher taxes that the improvement created in your tax roll.
In ten years you could find your escrow ballooning from $500 to a few grand in less than 5 years.
This is why I am now paying off my mortgage with double payments every month. I'll be paid off in less than 3 or 4 more years.
Don't cap out the max house you can afford based on what you make now. You'll seriously regret it.
Strategist
2016 Feb 22, 6:49am
I make around $120K and wouldn't dream of a mortgage over $200K.
You're 26 now, ask your self if you still see your self making 100K 30 years from now. Is there anyway your industry could dry up between now and then and do you posses comprable skills that you could continue making 3 figures if for what ever reason your current job type dries up.
The interest on a $200,000 loan at 3.5% in less than $600 per month, and stays fixed. I'm sure your rent will be a lot higher.
Oakland does seem like a rotten bargain, but other areas are still a good buy.
Tenpoundbass
2016 Feb 22, 11:00am
The interest on a $200,000 loan at 3.5% in less than $600 per month, and stays fixed. I'm sure your rent will be a lot higher.
Oakland does seem like a rotten bargain, but other areas are still a good buy.
Yeah but taxes and insurance does not!
phaster
2016 Feb 28, 3:15pm
was just down at the local coffee shop and picked a a copy of one of the local free rags...
just happened to have an article about buying local RE, so thought I'd post a brief intro and link...
The pros (and cons) in San Diego
By Taylor Schulte | Financial News
A 2015 study released by Zillow shows that San Diego currently has one of the worst housing markets in the nation, with inventory down 30 percent year-over-year, and the fourth highest median price in the nation at $528,000. While the market is seemingly in the seller’s favor, many opt to buy regardless of the housing market — be it for stability, tax benefits or something else altogether.
As a financial planner, I often find myself discussing real estate and its impacts on one’s financial future. And while there are plenty of reasons to buy, there are also a number arguments that support renting. Below are a few considerations to keep in mind when faced with that decision.
Done
2016 Feb 28, 3:45pm
Your entire tight lending thesis is now based on your 24 year daughter can't get a home loan
We did over 4 million loans last year as a country
Lending isn't tight at all, Americans buy homes ever day...
Exactly.... Americans buy homes ever day..... If a person has the cash or a stable ability to rent a home from the bank
then do so... If a person thinks he has the skill set to beat the market then roll the dice....
Strategist
2016 Feb 29, 7:04am
Get her a car loan ASAP
Thanks. Appreciate your advice.
She leased a Chevy Volt 2016.
BayArea
2016 Oct 18, 5:43am
it's 2016 and there's still people that talk bad about Oakland real estate, remarkable.
One of the fastest growing rental markets in the country. A town that gets all the spill over from people that can't afford that most expensive real estate market in the history of the USA (present day SF), all the recent gentrification, and yet people STILL denounce Oakland.
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I am 26 years old with a very secure $100k year job, pension, maxing out 401k, zero debt, excellent credit, and $110k in savings. I've been very fortunate to find a great job and kept a low overhead which has allowed me to save quite a bit over the last 4 years. Unfortunately I missed the boat timing wise for purchasing at discounted prices in San Diego as the bulk of my saving has been done in the last 2 years.
I've watched single family home prices climb and climb over the last few years as i've been saving and am starting to get worried that they will never come back down to what I consider “affordable” levels. I would love even a 10% correction in SD housing, and would ideally purchase a $425k-ish complete fixer upper with 20% down and fix it up from there. The worst house in the nicest neighborhood I can find!
Currently I rent a small but nice 1 bedroom apartment 2 blocks from the ocean with my significant other with a total cost of $900 to me after rent and all utilities/wifi. I love the area we live in and although the apartment is very small I can see myself doing this for a few more years and continuing to save at a slower rate. My only concern is that prices will continue their upward march and all my efforts will be wasted in the long run.
Prices seem crazy to me and flipping activity is rampant in the areas I look at. My initial inclination is to keep saving and keep a low overheard and wait for a potential correction. Any thoughts or opinions on where the market is heading and if I should buy now or wait?
#housing