patrick.net

Logan Mohtashami says

Strategist says

The problem is, you are Not an asshole.

Ask my wife this question she might give you a different answer ;-)

Speaking of which, crap it's our 4th Anniversary tomorrow I better go get something from 1-800 Flowers.com

No no no no. YOU better get her something. Flowers, Godiva candy, hot date, card etc.
I've been married 28 years. Let me assure you, women are strange creatures.

The other reasons why I believe the total 550K number is a miss is because of this trend data

Mortgage applications for new home purchases decreased by 4% in July relative to the previous month, the Mortgage Bankers Association said Thursday.

“Mortgage applications to home builder subsidiaries for new homes declined at a rate in line with the slowdown observed in the overall purchase mortgage market,

If you have soft middle data line, and revisions are 4 months lower, which we have seen. You need the back ( front loaded) demand data to be surprising to the upside.

Let's get the government out of the housing business. You want a house? 20% down please plus closing costs. And have half-way decent credit. Banks will have no problem holding mortgages like that. Who cares what the Real Estate salespeople think or say. These "people" can go back to working fast foods or standing on the street corner.

jvolstad says

Let's get the government out of the housing business. You want a house? 20% down please plus closing costs

Old article from 2012, in response to tight credit, brought in Joe Friday for this one. The government nor the private sector would mandate 20% down mortgages with home prices where they're are that would wipe out first time home buyers ( That don't have access to capital) as they would be buying homes in their early 40's

That's the reason the have 0% - 3.5% down payment

Hence why the tight lending thesis is simply dreadful

Diana Olick: Just a Few Questions, Ma’am

http://loganmohtashami.com/2012/03/30/diana-olick-just-a-few-questions-maam/

You’re a housing reporter, Ma’am. You know how it is. People listen to you. Lots of people listen.

Don’t reporters report facts, Ma’am? Just the facts? So, you won’t mind if I ask you a few questions?

I won’t take much of your time.

Twice this week you made the statement on CNBC that Mortgage lending standards are too strict. We’ve heard that opinion before. We’re familiar with that claim. I’m just here to investigate a bit further. You won’t mind, I hope Ma’am? Like I said, I won’t need much of your time. I’ll be brief.

Right now in the United States what a person needs as core requirements to buy a home is:

620 FICO Score
3.5% Down Payment
Income verified which shows a financial capacity to own a home
These are the simple facts. They are not strict guidelines. They make common sense. And, interest rates on mortgages have been at historic lows for over two years. But still we don’t have enough qualified homebuyers meeting these guidelines to absorb the true current inventory.

What do you make of that? I will tell you what I make of it. We are still trying to work through the trouble too many exotic loans that lax standards brought.

Here’s another thing. If it was up to me, I would raise the FHA down payment requirement to 7.5% and the FICO requirement to 660 to inject discipline into the housing market. FHA was not designed to be the primary loan for Americans to purchase homes. FHA capital reserve ratio is horrid. Do you know what that means, Ma’am? I’ll tell you what it means. It means if we have another recession in the next five years, you can kiss the 3.5% down payment goodbye because FHA will be in big financial trouble.

So, back to the reason I’m here, Ma’am. I have just a few questions, if you don’t mind. Won’t take long to answer them. I’m sure there are other folks, folks like me, who’d like to know.

Which guidelines, which you say are too strict, do you want to see changed for home purchases?
Do you want to bring back stated income loans?
Do you want to abolish appraisals for home purchases?
Do you believe there should be a no down payment option for home purchases?
As you can imagine, I believe the Lending standards are just fine the way they are. Yes, the lending process is horrid as I deal with crazy conditions from lenders every day. However, to change the core requirements just to get more home buyers into the market is very distributing in my view.

The private sector can do anything they want. If they want to make loans with only 3.5% down, great. Just don't expect taxpayers to guarantee these loans. 3.5%. That will not even cover the commission for a Realtard.

If buyers really want a house (oops, sorry NAR, I meant to say "home") , then buyers will find a way to cut back and save more. Of course that does not go over well in today's society. But I'm old school. BTW, my credit score is 824 with no outstanding debt.

Screw the Real Estate salespeople and the mortgage brokers. Neither one represents the buyers best interests.

jvolstad says

The private sector can do anything they want. If they want to make loans with only 3.5% down, great. Just don't expect taxpayers to guarantee these loans. 3.5%. That will not even cover the commission for a Realtard.

Almost 85% of all loans get sold to the government, private loans that are held are really the cleanest high quality, high income, top of the economic food chain.
Capital reserve ratio requirements kind of make it impossible for the private sector to ever have 50% plus share of the mortgage market.

Private market wants a government guarantee, they don't want any of this action unless they get it

Logan Mohtashami says

Which guidelines, which you say are too strict, do you want to see changed for home purchases?

Do you want to bring back stated income loans?

Do you want to abolish appraisals for home purchases?

Do you believe there should be a no down payment option for home purchases?

Yes
No
Yes

Also add:
Sub Prime 25% down
Interest only 25% down
No questions asked loans with 50% down.
Ease up on picky picky rules.

Strategist says

Yes

No

Yes

Also add:

Sub Prime 25% down

Interest only 25% down

No questions asked loans with 50% down.

Ease up on picky picky rules.

Stated income loans are here

Actually the most popular loan we have this year is the 12 month bank statement loan
Again, as I have always said, this is a small portion of the American population that can does these loans

Less than 8.9 million out of 150 million plus are self employed

Bank statement loan clients are between 22-29K a month

FHA, VA and GSE all have sub prime qualification rates

Min 620

Fico scores for GSE, VA and FHA

So that is and has been here already. In fact FHA can go as low as 560

Interest only loan is back 20% down, have to qualify on a 20 year amortization loan with a 2% higher note rate.

Again, only a small portion of people can do it

No question loans will never happen due to the anti money laundry laws in effect in America to prevent money laundry through mortgages and real estate purchases

Strategist says

Do you believe there should be a no down payment option for home purchases?

VA 0% down
GSE 3% down FTB, 5% conventional
FHA 3.5% Down

very very low

How about this. 3.5% down plus Realtor and mortgage broker commissions, plus any closing costs. That works for me. No more funny loans on the side (80/20) either.

jvolstad says

No more funny loans on the side (80/20) either.

80/20's are banned, not coming back, the mortgage insurance the rest of the non 20% down payment loans

Wealthy Income California residents do have access to 10% down 2nd lien to make up the difference after a $625,500 first lien up to 1.1 million.

However, as always these are 200K-500K income buyers who have access to this loan and they need 10% down

VA loans are the only 0% down loan in America

bgamall4 says

Sounds like the Chinese are coming since they were burned in their own stock market:

It's still a very small portion of all the homes sold in America and it tends to be So Cal location specific.

logan, it appears that YoY home sales price growth has been trending down since 2013 - eventually one would expect this to taper down to 0% sales price growth YoY and then eventually head to negative sales price growth.

this perhaps could be a turning point on the current cycle, but for different reasons than over-supply - is this due to the cash buyer ramping down? could it be the buyer side of things from a demand standpoint (affordability) that leads this cycle into the down slope?

builders can go smaller/cheaper but what can banks/investors and the rest of the existing home sellers do to mitigate this effect?

landtof says

logan, it appears that YoY home sales price growth has been trending down since 2013

One thing with new homes, the total volume is low, working from 2 years of just 430K sales total,( 2013 and 2014 not that many homes

In this cycle what has happened is make up shift of sales is bigger to smaller, first time gap over 400K more than 200K

Builders have to make money, they were smart here, the smaller home business model didn't make sense, so I give them much kudos for not even attempting to go small and just build out multifamily homes big time.

So the lower trend in median sales price to be actually a plus for demand, either the make up shift a bit better or they're discounting on the top end.

Either way it's better for sales growth.

Median sales price of new houses sold in July was $285,900, up from June and a year ago

http://bit.ly/1KgfnhB

The bay area will follow, I think we are already entering the correction with a nice blow off top, I think we will see a considerable slowdown August into winter. If the Fed stalls yet once again on their measly quarter point hike it may get a temporary breather, but it's coming.

I've been doing everything to help all home sales. The solution is simple. Overpay for shacks.

I just can't get it through thick skulls .