stratosphere
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B of A to make loans to low income borrowers

Wed Apr 03, 2019 1:00 pm

So Bank of America says it will make 5 billion in loans available to low and moderate income borrowers.. On the face of it this screams lets not go through this again. Did we not learn any lessons from the 2008 financial meltdown? I understand a lot of variables were at play in the 2007/08 housing and banking bust. Greed, lack of regulations, predatory lending and lending to people who could not and should not have owned a home. I got caught up in the last one my mother bought a home in Cape Coral FL in 2005 cash for 230k and when she died in 2010 it was worth 50k. I sure hope there are better rules in place this go around.

https://www.yahoo.com/finance/news/bank ... 11503.html
 
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cranberrysaus
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 1:04 pm

Nobody learned any lessons because nobody was punished.
 
dtw2hyd
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 1:42 pm

Probably the $1T TARP funds they were sitting on for years earned interest several times more than $5B they are ready to risk.
 
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einsteinboricua
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 1:43 pm

But...but...regulations! That's radical extreme socialism!!!!
"You haven't seen a tree until you've seen its shadow from the sky."
 
KentB27
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 2:19 pm

This isn't really anything new. Almost every bank and mortgage lender offers programs and assistance for low income and first time home buyers that allow them to put very little money down. My brother bought a condo in Kansas City in August of 2018 and he qualified for $15k in down payment assistance. If he lives there for at least 5 years then he doesn't have to pay any of that money back.

Also, it's not a question of if, but when the housing market becomes depressed again. I personally would love it if the housing market slumps for my own selfish reasons. I am currently in a position to massively benefit from a depressed housing market. Hopefully we don't see a crash like 2008 again, but the housing market is at an unsustainable high right now. It will come back down again.
 
GalaxyFlyer
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 2:33 pm

Simple rule: if you can’t pay cash, you can’t afford it.

GF
 
winginit
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 5:06 pm

GalaxyFlyer wrote:
Simple rule: if you can’t pay cash, you can’t afford it.

GF


Interesting rule there that would result in a vast majority of businesses never getting off the ground and a huge quantity of people around the world never able to purchase real estate.
 
GalaxyFlyer
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 8:30 pm

An appreciating asset like a house qualifies for being purchased with a loan—simple asset management. That said, a mortgage should be considered only based on 20% down, principal and interest payments not to exceed 28% of income, total debt service not to exceed 36%. Very old fashioned rules that are very well related to stable mortgages.

It’s very easy to see most US households spend way too much and use way too much credit.

GF
 
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Dutchy
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 8:33 pm

GalaxyFlyer wrote:
An appreciating asset like a house qualifies for being purchased with a loan—simple asset management. That said, a mortgage should be considered only based on 20% down, principal and interest payments not to exceed 28% of income, total debt service not to exceed 36%. Very old fashioned rules that are very well related to stable mortgages.

It’s very easy to see most US households spend way too much and use way too much credit.

GF


The US economy would be way down if your lifestyle would be the norm 8-)

But indeed, other then a mortgage, I have no other debts.
Many happy landings, greetings from The Netherlands!
 
LMP737
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 9:47 pm

GalaxyFlyer wrote:
Simple rule: if you can’t pay cash, you can’t afford it.

GF


I know saying that gives you a warm fuzzy feeling. Problem is how many of us can afford to plop down cash for a house?
Never take financial advice from co-workers.
 
GalaxyFlyer
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 10:53 pm

I didn’t say you couldn’t take on debt for appreciating assets, see post above. Using credit for food, clothes, electronic gadgets is ridiculous.

But, I didn’t buy a house until I meet the standards above, cash for the land plus 20% on the house. My wife and I were raised to be responsible and frugal.

GF
 
GalaxyFlyer
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 10:55 pm

Dutchy wrote:
GalaxyFlyer wrote:
An appreciating asset like a house qualifies for being purchased with a loan—simple asset management. That said, a mortgage should be considered only based on 20% down, principal and interest payments not to exceed 28% of income, total debt service not to exceed 36%. Very old fashioned rules that are very well related to stable mortgages.

It’s very easy to see most US households spend way too much and use way too much credit.

GF


The US economy would be way down if your lifestyle would be the norm 8-)

But indeed, other then a mortgage, I have no other debts.


Might not be as big, but it wouldn’t be a balloon ready to pop.
 
NIKV69
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Re: B of A to make loans to low income borrowers

Wed Apr 03, 2019 11:07 pm

GalaxyFlyer wrote:
Simple rule: if you can’t pay cash, you can’t afford it.

GF


I listen to Dave Ramsey every day!
Nikon from day one, Nikon till I die.
 
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Aesma
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 12:36 am

GalaxyFlyer wrote:
I didn’t say you couldn’t take on debt for appreciating assets, see post above.


First of all, the main thing we're hearing about these days from the US is unsustainable car loans. Cars are everything except appreciating assets, bar a few collectible exceptions (and even there, I think some prices are ridiculous and will drop at some point).

Secondly, from what I've seen since the last crisis, and as evidenced by stratosphere's case in this very thread, real estate in the US is not reliably appreciating, bar again some exceptions, that poor people probably can't take advantage of.

If I was tasked with giving out loans, I would be very stressed out by the situation in the US.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
DGVT
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 1:04 am

GalaxyFlyer wrote:
Simple rule: if you can’t pay cash, you can’t afford it.

GF


What about those cool leveraged buyouts in the 1980s? Like 95% debt.
 
Airstud
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 1:15 am

stratosphere wrote:
So Bank of America says it will make 5 billion in loans available to low and moderate income borrowers.. On the face of it this screams lets not go through this again. Did we not learn any lessons from the 2008 financial meltdown? I understand a lot of variables were at play in the 2007/08 housing and banking bust. Greed, lack of regulations, predatory lending and lending to people who could not and should not have owned a home. I got caught up in the last one my mother bought a home in Cape Coral FL in 2005 cash for 230k and when she died in 2010 it was worth 50k. I sure hope there are better rules in place this go around.

https://www.yahoo.com/finance/news/bank ... 11503.html


Lack of regulations and also a lot of lenders didn't bother to verify income.

Back then, even Wells Fargo didn't screw that part up.

Hopefully B of A is using good sense and only issuing loans realistically.
Pancakes are delicious.
 
GalaxyFlyer
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 1:18 am

[quoteSecondly, from what I've seen since the last crisis, and as evidenced by stratosphere's case in this very thread, real estate in the US is not reliably appreciating, bar again some exceptions, that poor people probably can't take advantage of.][/quote]

That’s where the 20% down payment comes in—the debtor has “skin in the game”.
 
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TheFlyingDisk
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 1:37 am

GalaxyFlyer wrote:
Using credit for food, clothes, electronic gadgets is ridiculous


Not if it's zero interest. I bought my phone using my credit card's zero interest easy payment plan, and the money I have that would have been used to pay for the phone is now in an investment fund earning 6%.

If you're smart enough you can use debt to your advantage.
I FLY KLM+ALASKA+QATAR+MALAYSIA+AIRASIA+MALINDO
 
1836Sam
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 3:15 am

Oh for the day when GF’s generation (i.e., the generation that has entirely squandered everything handed to them on a silver platter by the Greatest Generation) is absolutely gone. They talk only in costs and they have zero idea of the scarcity of real salary earning opportunities. Yet they keep on screwing over the country on the daily.

Hope you’re happy, Gramps!
 
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trpmb6
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 12:55 pm

TheFlyingDisk wrote:
GalaxyFlyer wrote:
Using credit for food, clothes, electronic gadgets is ridiculous


Not if it's zero interest. I bought my phone using my credit card's zero interest easy payment plan, and the money I have that would have been used to pay for the phone is now in an investment fund earning 6%.

If you're smart enough you can use debt to your advantage.


I use a credit card to make purchases because I get cash back on the purchase that I wouldn't otherwise get if I simply paid cash. Then I just pay it off each month. Plus the added protection of fraud prevention that credit cards have over regular debit cards. The question does remain though, do retailers/restaurants etc increase prices to cover their costs due to credit card fees, and if we all stopped using credit cards would they drop prices the 3ish% it costs them on each transaction? Unlikely. So I continue doing what I do.

Dave Ramsey's philosophy is meant more for people who have a hard time restraining themselves. Many of his talking points are relevant to everyone, but some are more geared towards those who have trouble budgeting. For instance, my mortgage interest rate is so low that it's actually better for me to just put the money I would spend on principal into a high yield money market account. That being said, there are benefits to being completely debt free as well. Everyone has to do a cost/benefit analysis on their own to decide the right course. Unfortunately, most people don't think this way or don't have the education to formulate their thoughts in this way.

1836Sam wrote:
They talk only in costs and they have zero idea of the scarcity of real salary earning opportunities.



Care to cite a source? In my industry (aerospace) wages have been rising for quite some time due to retiring baby boomers and lack of skilled workers across the spectrum from mechanics and inspectors to engineers.
 
GalaxyFlyer
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 2:02 pm

1836Sam wrote:
Oh for the day when GF’s generation (i.e., the generation that has entirely squandered everything handed to them on a silver platter by the Greatest Generation) is absolutely gone. They talk only in costs and they have zero idea of the scarcity of real salary earning opportunities. Yet they keep on screwing over the country on the daily.

Hope you’re happy, Gramps!


BS. We invented and built all those toys your group of slackers enjoy—iPhones, online music, laptops, cheap airfare.... And, Gen X and millennials have the best opportunities in aerospace in 60 years. GTFO.
 
1836Sam
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 4:03 pm

trpmb6 wrote:
1836Sam wrote:
They talk only in costs and they have zero idea of the scarcity of real salary earning opportunities.



Care to cite a source? In my industry (aerospace) wages have been rising for quite some time due to retiring baby boomers and lack of skilled workers across the spectrum from mechanics and inspectors to engineers.


Well if that's your experience, it must be true. :sarcastic:

I'm not doing too shabby either but I'm smart enough to know that "As It Goes for Sam, It May Not Necessarily Go That Way for Others."

If you want a "source," why don't you use Google . . . plenty has been written out there about how this generation could very well be the first that does worse than their parents.
 
1836Sam
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 4:03 pm

GalaxyFlyer wrote:
1836Sam wrote:
Oh for the day when GF’s generation (i.e., the generation that has entirely squandered everything handed to them on a silver platter by the Greatest Generation) is absolutely gone. They talk only in costs and they have zero idea of the scarcity of real salary earning opportunities. Yet they keep on screwing over the country on the daily.

Hope you’re happy, Gramps!


BS. We invented and built all those toys your group of slackers enjoy—iPhones, online music, laptops, cheap airfare.... And, Gen X and millennials have the best opportunities in aerospace in 60 years. GTFO.


That's the spirit!

Wanting more thanks . . .

Nah.
 
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trpmb6
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 5:08 pm

1836Sam wrote:
trpmb6 wrote:
1836Sam wrote:
They talk only in costs and they have zero idea of the scarcity of real salary earning opportunities.



Care to cite a source? In my industry (aerospace) wages have been rising for quite some time due to retiring baby boomers and lack of skilled workers across the spectrum from mechanics and inspectors to engineers.


Well if that's your experience, it must be true. :sarcastic:

I'm not doing too shabby either but I'm smart enough to know that "As It Goes for Sam, It May Not Necessarily Go That Way for Others."

If you want a "source," why don't you use Google . . . plenty has been written out there about how this generation could very well be the first that does worse than their parents.


Hmm, didn't you say the same thing to someone else in another thread and then get mad when they said "why don't you go google it then?"

:roll:
 
1836Sam
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 5:10 pm

trpmb6 wrote:
1836Sam wrote:
trpmb6 wrote:


Care to cite a source? In my industry (aerospace) wages have been rising for quite some time due to retiring baby boomers and lack of skilled workers across the spectrum from mechanics and inspectors to engineers.


Well if that's your experience, it must be true. :sarcastic:

I'm not doing too shabby either but I'm smart enough to know that "As It Goes for Sam, It May Not Necessarily Go That Way for Others."

If you want a "source," why don't you use Google . . . plenty has been written out there about how this generation could very well be the first that does worse than their parents.


Hmm, didn't you say the same thing to someone else in another thread and then get mad when they said "why don't you go google it then?"

:roll:


I don't know . . . did I? :roll: Do I have a fan group? I certainly wouldn't have picked you as President.

Is this the first you're hearing of the millennial generation doing worse off than their parents' generation? Or is that the liberal media making stuff up again?
 
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trpmb6
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 5:16 pm

1836Sam wrote:
trpmb6 wrote:
1836Sam wrote:

Well if that's your experience, it must be true. :sarcastic:

I'm not doing too shabby either but I'm smart enough to know that "As It Goes for Sam, It May Not Necessarily Go That Way for Others."

If you want a "source," why don't you use Google . . . plenty has been written out there about how this generation could very well be the first that does worse than their parents.


Hmm, didn't you say the same thing to someone else in another thread and then get mad when they said "why don't you go google it then?"

:roll:


I don't know . . . did I? :roll: Do I have a fan group? I certainly wouldn't have picked you as President.

Is this the first you're hearing of the millennial generation doing worse off than their parents' generation? Or is that the liberal media making stuff up again?


Every generation is better off than the one that precedes them. That's the beauty of this country we live in.
 
1836Sam
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 5:26 pm

trpmb6 wrote:
1836Sam wrote:
trpmb6 wrote:

Hmm, didn't you say the same thing to someone else in another thread and then get mad when they said "why don't you go google it then?"

:roll:


I don't know . . . did I? :roll: Do I have a fan group? I certainly wouldn't have picked you as President.

Is this the first you're hearing of the millennial generation doing worse off than their parents' generation? Or is that the liberal media making stuff up again?


Every generation is better off than the one that precedes them. That's the beauty of this country we live in.


Ah, of course. Do you have a source?

Nevermind, don't bother.
 
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trpmb6
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 5:57 pm

1836Sam wrote:
trpmb6 wrote:
1836Sam wrote:

I don't know . . . did I? :roll: Do I have a fan group? I certainly wouldn't have picked you as President.

Is this the first you're hearing of the millennial generation doing worse off than their parents' generation? Or is that the liberal media making stuff up again?


Every generation is better off than the one that precedes them. That's the beauty of this country we live in.


Ah, of course. Do you have a source?

Nevermind, don't bother.


You can google it. We have this wonderful thing called the internet that the previous generation is really just now grasping the greatness of.

:laughing:
 
StarAC17
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 8:03 pm

Dutchy wrote:
GalaxyFlyer wrote:
An appreciating asset like a house qualifies for being purchased with a loan—simple asset management. That said, a mortgage should be considered only based on 20% down, principal and interest payments not to exceed 28% of income, total debt service not to exceed 36%. Very old fashioned rules that are very well related to stable mortgages.

It’s very easy to see most US households spend way too much and use way too much credit.

GF


The US economy would be way down if your lifestyle would be the norm 8-)

But indeed, other then a mortgage, I have no other debts.


That is a discussion that needs to be had.
Overuse of credit has an effect on keeping prices up and people would realize they could do with a lot less.

Aesma wrote:
GalaxyFlyer wrote:
I didn’t say you couldn’t take on debt for appreciating assets, see post above.


First of all, the main thing we're hearing about these days from the US is unsustainable car loans. Cars are everything except appreciating assets, bar a few collectible exceptions (and even there, I think some prices are ridiculous and will drop at some point).

Secondly, from what I've seen since the last crisis, and as evidenced by stratosphere's case in this very thread, real estate in the US is not reliably appreciating, bar again some exceptions, that poor people probably can't take advantage of.

If I was tasked with giving out loans, I would be very stressed out by the situation in the US.


Another financial Guru who I have listed to, Suze Orman says that if you can't pay off a car in 3 year you can't afford it. Also leasing is not wise financial advice and only advised in certain circumstances. .
Engineers Rule The World!!!!!
 
Redd
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 8:11 pm

winginit wrote:
GalaxyFlyer wrote:
Simple rule: if you can’t pay cash, you can’t afford it.

GF


Interesting rule there that would result in a vast majority of businesses never getting off the ground and a huge quantity of people around the world never able to purchase real estate.



It would result in real estate prices being back to affordable, and people having what they can truly afford. Crazy idea, i know...
 
1836Sam
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 8:22 pm

Redd wrote:
winginit wrote:
GalaxyFlyer wrote:
Simple rule: if you can’t pay cash, you can’t afford it.

GF


Interesting rule there that would result in a vast majority of businesses never getting off the ground and a huge quantity of people around the world never able to purchase real estate.



It would result in real estate prices being back to affordable, and people having what they can truly afford. Crazy idea, i know...


Well you heard it here first everyone ... the “conservative” Luddites are now arguing against secured debt.

Maybe they really do want to go back to the Middle Ages.
 
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Dutchy
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 8:24 pm

StarAC17 wrote:
Dutchy wrote:
GalaxyFlyer wrote:
An appreciating asset like a house qualifies for being purchased with a loan—simple asset management. That said, a mortgage should be considered only based on 20% down, principal and interest payments not to exceed 28% of income, total debt service not to exceed 36%. Very old fashioned rules that are very well related to stable mortgages.

It’s very easy to see most US households spend way too much and use way too much credit.

GF


The US economy would be way down if your lifestyle would be the norm 8-)

But indeed, other then a mortgage, I have no other debts.


That is a discussion that needs to be had.
Overuse of credit has an effect on keeping prices up and people would realize they could do with a lot less.


That is only true for already existing stuff, houses / other capital intensive goods. If the price goes up of these items, nothing has been created in the economy, nothing has been done, if the prices go up more than the inflation you have a macroeconomic problem. The economy is a combination of all the services and goods produced in a country and there you see the problem.
The overuse of credit for consumption is also indeed a problem because in the end, you will pay more and more interest without getting something in return.

StarAC17 wrote:
Aesma wrote:
GalaxyFlyer wrote:
I didn’t say you couldn’t take on debt for appreciating assets, see post above.


First of all, the main thing we're hearing about these days from the US is unsustainable car loans. Cars are everything except appreciating assets, bar a few collectible exceptions (and even there, I think some prices are ridiculous and will drop at some point).

Secondly, from what I've seen since the last crisis, and as evidenced by stratosphere's case in this very thread, real estate in the US is not reliably appreciating, bar again some exceptions, that poor people probably can't take advantage of.

If I was tasked with giving out loans, I would be very stressed out by the situation in the US.


Another financial Guru who I have listed to, Suze Orman says that if you can't pay off a car in 3 year you can't afford it. Also leasing is not wise financial advice and only advised in certain circumstances. .


Sound advice, except if you use the car to get more money. I personally would not buy a car with borrowed money. And would only lease one, with my business, but that would be more of a tax measure than something else.
Many happy landings, greetings from The Netherlands!
 
winginit
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 8:35 pm

Redd wrote:
winginit wrote:
GalaxyFlyer wrote:
Simple rule: if you can’t pay cash, you can’t afford it.

GF


Interesting rule there that would result in a vast majority of businesses never getting off the ground and a huge quantity of people around the world never able to purchase real estate.



It would result in real estate prices being back to affordable, and people having what they can truly afford. Crazy idea, i know...


Pray tell of the time in history when real estate prices were affordable on account of there being no debt!
 
1836Sam
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Re: B of A to make loans to low income borrowers

Thu Apr 04, 2019 10:35 pm

winginit wrote:
Redd wrote:
winginit wrote:

Interesting rule there that would result in a vast majority of businesses never getting off the ground and a huge quantity of people around the world never able to purchase real estate.



It would result in real estate prices being back to affordable, and people having what they can truly afford. Crazy idea, i know...


Pray tell of the time in history when real estate prices were affordable on account of there being no debt!


I think he is thinking of feudalism (hey let’s not forget they were really taken care of well!) or any one of a number of countries where you can’t get a mortgage due to the historical pattern of runaway inflation and currency collapses.
 
GalaxyFlyer
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Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 1:00 am

1836Sam wrote:
Redd wrote:
winginit wrote:

Interesting rule there that would result in a vast majority of businesses never getting off the ground and a huge quantity of people around the world never able to purchase real estate.



It would result in real estate prices being back to affordable, and people having what they can truly afford. Crazy idea, i know...


Well you heard it here first everyone ... the “conservative” Luddites are now arguing against secured debt.

Maybe they really do want to go back to the Middle Ages.


There’s no argument against debt secured by an asset that either generates value equal to or greater than the debt service. There is an argument against debt secured by non-productive or depreciating assets. Using a credit card to buy food or clothes is ridiculous UNLESS you pay it off monthly. There’s no income to service the debt. A mortgage is fine for a house that will provide “free” housing later in life. Gambling on your house going up 20% a year and being an income source is dangerous.

Now, get off the lawn.

GF
 
Redd
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Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 5:40 am

1836Sam wrote:
Redd wrote:
winginit wrote:

Interesting rule there that would result in a vast majority of businesses never getting off the ground and a huge quantity of people around the world never able to purchase real estate.



It would result in real estate prices being back to affordable, and people having what they can truly afford. Crazy idea, i know...


Well you heard it here first everyone ... the “conservative” Luddites are now arguing against secured debt.

Maybe they really do want to go back to the Middle Ages.



Conservative...? :rotfl:

Before the rise of the modern mortgage (early 1950's), the average DTI in the USA was 20%, the average home was, on average, 2 years of an average salary. Residential real estate was not a speculative commodity.
Approving loans to buyers with little or no downpayment, and low unstable income, is exactly what caused the the last global recession, you may be to young to remember?

Giving loan access to unqualified buyers fuels speculation and drives prices over the threshold of what is affordable universally. Take a look at prices in places like NYC, Toronto, Vancouver. A single person's annual income of 100k just about qualifies you for a bachelor condo. 500-600 sq/ft. If you go back 20-25 years, 100k got you qualified to get into a large upscale condo, large house, central locations....

Regulation and significant down payments are important factors in keeping the real estate market stable. That's not even up for speculation.
 
bennett123
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Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 6:37 am

I thought that the issue of Sub Prime Mortgages was in the past. Clearly due to make a comeback.

As for Credit Cards for consumables, this is rarely a good idea.
 
1836Sam
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Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 2:53 pm

Redd wrote:
1836Sam wrote:
Redd wrote:


It would result in real estate prices being back to affordable, and people having what they can truly afford. Crazy idea, i know...


Well you heard it here first everyone ... the “conservative” Luddites are now arguing against secured debt.

Maybe they really do want to go back to the Middle Ages.



Conservative...? :rotfl:

Before the rise of the modern mortgage (early 1950's), the average DTI in the USA was 20%, the average home was, on average, 2 years of an average salary. Residential real estate was not a speculative commodity.
Approving loans to buyers with little or no downpayment, and low unstable income, is exactly what caused the the last global recession, you may be to young to remember?

Giving loan access to unqualified buyers fuels speculation and drives prices over the threshold of what is affordable universally. Take a look at prices in places like NYC, Toronto, Vancouver. A single person's annual income of 100k just about qualifies you for a bachelor condo. 500-600 sq/ft. If you go back 20-25 years, 100k got you qualified to get into a large upscale condo, large house, central locations....

Regulation and significant down payments are important factors in keeping the real estate market stable. That's not even up for speculation.


Don’t think anyone said otherwise.

But all the above, as you say, easily solvable through sensible regulations.

Which the Obama administration implemented and the Trump administration is destroying on the daily.
 
mham001
Posts: 5616
Joined: Thu Feb 03, 2005 4:52 am

Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 3:32 pm

There is a lot more to this than anybody here has stated. How many of you have tried to get refinanced lately? I have well over 50% equity (80% in one) on two properties but could not get a conventional refinance, although it would literally save me thousands per month, primarily for three reasons - self employed, rental properties and not enough established credit. This then requires a person to get into hard money loans at very high interest rates if they want to enter the housing market. These lenders do no report to the reporting agencies so there is no credit history established there. To establish enough credit, you need to use those credit cards. The relaxation of Dodd-Frank has helped by allowing more institutions to sell mortgages. It is insane what some of the underwriters are requiring and the reporting agencies hold the rest of the cards.

So no, what BofA has announced is not an absolute return to the subprime days, where there was massive cheating. I personally refused to take part in that and have very paid a heavy price. There are plenty of legitimate buyers who have been regulated out and could be helped by this.
 
Redd
Posts: 1032
Joined: Mon Jan 07, 2013 3:40 am

Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 4:08 pm

1836Sam wrote:
Redd wrote:
1836Sam wrote:

Well you heard it here first everyone ... the “conservative” Luddites are now arguing against secured debt.

Maybe they really do want to go back to the Middle Ages.



Conservative...? :rotfl:

Before the rise of the modern mortgage (early 1950's), the average DTI in the USA was 20%, the average home was, on average, 2 years of an average salary. Residential real estate was not a speculative commodity.
Approving loans to buyers with little or no downpayment, and low unstable income, is exactly what caused the the last global recession, you may be to young to remember?

Giving loan access to unqualified buyers fuels speculation and drives prices over the threshold of what is affordable universally. Take a look at prices in places like NYC, Toronto, Vancouver. A single person's annual income of 100k just about qualifies you for a bachelor condo. 500-600 sq/ft. If you go back 20-25 years, 100k got you qualified to get into a large upscale condo, large house, central locations....

Regulation and significant down payments are important factors in keeping the real estate market stable. That's not even up for speculation.


Don’t think anyone said otherwise.

But all the above, as you say, easily solvable through sensible regulations.

Which the Obama administration implemented and the Trump administration is destroying on the daily.


So I guess we agree.
 
1836Sam
Posts: 471
Joined: Fri Mar 08, 2019 6:35 am

Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 4:14 pm

Redd wrote:
1836Sam wrote:
Redd wrote:


Conservative...? :rotfl:

Before the rise of the modern mortgage (early 1950's), the average DTI in the USA was 20%, the average home was, on average, 2 years of an average salary. Residential real estate was not a speculative commodity.
Approving loans to buyers with little or no downpayment, and low unstable income, is exactly what caused the the last global recession, you may be to young to remember?

Giving loan access to unqualified buyers fuels speculation and drives prices over the threshold of what is affordable universally. Take a look at prices in places like NYC, Toronto, Vancouver. A single person's annual income of 100k just about qualifies you for a bachelor condo. 500-600 sq/ft. If you go back 20-25 years, 100k got you qualified to get into a large upscale condo, large house, central locations....

Regulation and significant down payments are important factors in keeping the real estate market stable. That's not even up for speculation.


Don’t think anyone said otherwise.

But all the above, as you say, easily solvable through sensible regulations.

Which the Obama administration implemented and the Trump administration is destroying on the daily.


So I guess we agree.


As Ron McD says, “I’m Lovin’ It!”
 
StarAC17
Posts: 3659
Joined: Thu Aug 07, 2003 11:54 am

Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 8:07 pm

Dutchy wrote:
StarAC17 wrote:
Dutchy wrote:

The US economy would be way down if your lifestyle would be the norm 8-)

But indeed, other then a mortgage, I have no other debts.


That is a discussion that needs to be had.
Overuse of credit has an effect on keeping prices up and people would realize they could do with a lot less.


That is only true for already existing stuff, houses / other capital intensive goods. If the price goes up of these items, nothing has been created in the economy, nothing has been done, if the prices go up more than the inflation you have a macroeconomic problem. The economy is a combination of all the services and goods produced in a country and there you see the problem.
The overuse of credit for consumption is also indeed a problem because in the end, you will pay more and more interest without getting something in return.

StarAC17 wrote:
Aesma wrote:

First of all, the main thing we're hearing about these days from the US is unsustainable car loans. Cars are everything except appreciating assets, bar a few collectible exceptions (and even there, I think some prices are ridiculous and will drop at some point).

Secondly, from what I've seen since the last crisis, and as evidenced by stratosphere's case in this very thread, real estate in the US is not reliably appreciating, bar again some exceptions, that poor people probably can't take advantage of.

If I was tasked with giving out loans, I would be very stressed out by the situation in the US.


Another financial Guru who I have listed to, Suze Orman says that if you can't pay off a car in 3 year you can't afford it. Also leasing is not wise financial advice and only advised in certain circumstances. .


Sound advice, except if you use the car to get more money. I personally would not buy a car with borrowed money. And would only lease one, with my business, but that would be more of a tax measure than something else.


Yes the exception is that if you use a car for business then you can write off the payments on your taxes. If you are using a car to get from point A to point B then not having the burden of a car payment is a huge benefit.

Redd wrote:
1836Sam wrote:
Redd wrote:


It would result in real estate prices being back to affordable, and people having what they can truly afford. Crazy idea, i know...


Well you heard it here first everyone ... the “conservative” Luddites are now arguing against secured debt.

Maybe they really do want to go back to the Middle Ages.



Conservative...? :rotfl:

Before the rise of the modern mortgage (early 1950's), the average DTI in the USA was 20%, the average home was, on average, 2 years of an average salary. Residential real estate was not a speculative commodity.
Approving loans to buyers with little or no downpayment, and low unstable income, is exactly what caused the the last global recession, you may be to young to remember?

Giving loan access to unqualified buyers fuels speculation and drives prices over the threshold of what is affordable universally. Take a look at prices in places like NYC, Toronto, Vancouver. A single person's annual income of 100k just about qualifies you for a bachelor condo. 500-600 sq/ft. If you go back 20-25 years, 100k got you qualified to get into a large upscale condo, large house, central locations....

Regulation and significant down payments are important factors in keeping the real estate market stable. That's not even up for speculation.


Canada has one of the soundest banking systems in the world and the foreclosure rate is very low, also our government is making it harder not easier to get mortgages and not easier.
Much of what makes certain areas in Canada expensive are a combination of high demand (lucrative employment market) and foreign homebuyers buying up real estate for cash, often it is also is sitting vacant.

bennett123 wrote:
I thought that the issue of Sub Prime Mortgages was in the past. Clearly due to make a comeback.

As for Credit Cards for consumables, this is rarely a good idea.


It is a good idea if its paid in full each month and attached to a reward. Then you stand to get some money or get travel rewards.
Engineers Rule The World!!!!!
 
bennett123
Posts: 8947
Joined: Sun Aug 15, 2004 12:49 am

Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 8:59 pm

Correct, and the CC firms base their business model on most people NOT doing so.

Equally, debt consolidation onto a lower rate makes good sense if you pay it off. CC firms base their business models on most people NOT doing so
 
GalaxyFlyer
Posts: 3731
Joined: Fri Jan 01, 2016 4:44 am

Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 9:01 pm

Well maybe, frequently cash speaks and what it says is, “here’s a nice discount that makes up for not getting rewards points”. I’m buying new tires, cash, gets me mounting and balancing free. Credit card, I’d pay for it all.

GF
 
1836Sam
Posts: 471
Joined: Fri Mar 08, 2019 6:35 am

Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 9:05 pm

GalaxyFlyer wrote:
Well maybe, frequently cash speaks and what it says is, “here’s a nice discount that makes up for not getting rewards points”. I’m buying new tires, cash, gets me mounting and balancing free. Credit card, I’d pay for it all.

GF


Wow sounds like you live in a state where the economy still depends on bartering. How do you use the Interwebz?
 
GalaxyFlyer
Posts: 3731
Joined: Fri Jan 01, 2016 4:44 am

Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 9:55 pm

I use credit cards, but cash isn’t bartering, is it? Amazing what opening up a roll of hundreds will do to a negotiation.

GF
 
1836Sam
Posts: 471
Joined: Fri Mar 08, 2019 6:35 am

Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 10:19 pm

GalaxyFlyer wrote:
I use credit cards, but cash isn’t bartering, is it? Amazing what opening up a roll of hundreds will do to a negotiation.

GF


Make it rain, GF (guhrlfriend?), make it rain!

And, while you’re at it, you should reach out to poor mham and help him with his credit issues.
 
GalaxyFlyer
Posts: 3731
Joined: Fri Jan 01, 2016 4:44 am

Re: B of A to make loans to low income borrowers

Fri Apr 05, 2019 11:15 pm

I, in my Champ, flew a guy over to a nearby airport to look at a Cub. He’d seen it before, the owner was solid on $1800. Tommy pulled out 14 $100 bill and said, “this is all I brought today.” About thirty minutes later he was flying his Cub home.

GF
 
1836Sam
Posts: 471
Joined: Fri Mar 08, 2019 6:35 am

Re: B of A to make loans to low income borrowers

Sat Apr 06, 2019 12:16 am

GalaxyFlyer wrote:
I, in my Champ, flew a guy over to a nearby airport to look at a Cub. He’d seen it before, the owner was solid on $1800. Tommy pulled out 14 $100 bill and said, “this is all I brought today.” About thirty minutes later he was flying his Cub home.

GF


Well, damned GF, if that was all he had, how did he reimburse you for fuel? I-O-U?
 
GalaxyFlyer
Posts: 3731
Joined: Fri Jan 01, 2016 4:44 am

Re: B of A to make loans to low income borrowers

Sat Apr 06, 2019 4:06 pm

It was a gift, I got to fly the Cub after he recovered it. You have a lot to learn about negotiations.

GF

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