The 67-cent down-payment mortgage

posted at 11:36 am on September 14, 2010 by Ed Morrissey

The financial collapse occurred because housing lenders wrote paper to people who couldn’t afford the houses they bought, often getting a no-down arrangement, while lenders sold the paper to Fannie Mae and Freddie Mac, which securitized them and spread the bubble throughout the financial markets in order to provide even more capital for even more bad loans.  After nearly watching the Western world’s financial structure melt down, one would hope that we would have learned a lesson from the catastrophe.  Apparently not, as CNBC’s Diana Olick reports (via Instapundit):

At around the same time this program went into effect, the New York Times did a piece on a small program Fannie Mae is implementing through state housing finance agencies, which have been crippled by the recession. It’s called Affordable Advantage, and it allows first-time home buyers in four states (Massachusetts, Minnesota, Idaho and Wisconsin) to get essentially no-money-down loans that are then sold to Fannie Mae. It requires $1000.00 down, but the couple profiled in the piece received a grant, and ended up paying just 67 cents for a $115,000 home.

The Fannie Mae program requires a minimum credit score of 680 (720 in Massachusetts) and the buyer must live in the home. All loans are 30-year fixed. The arguments for the program are persuasive: It wasn’t the no-money-down loans themselves that fueled the housing crash, it was the poor underwriting. These loans are very strictly underwritten. Adjustable rate loans were the primary drivers of default, while these loans are fixed.

No money down!  Government grants!  In other words, we are once again underwriting the process of putting people into homes they can’t afford at the moment, and ensuring that they have no really good reason to stick with it if times get tough.  Down payments are a means of ensuring positive equity in a home right from the start, an investment by the buyer that ties them to the property.

Granted, these don’t involve ARMs and balloon payments, but they do put the taxpayer in the position of guaranteeing questionable lending arrangements through Fannie and Freddie.  And that’s what got us into the problem in the first place.  Olick says it wasn’t the no-down loans that created the crash, but they were certainly a part of the problem, and they continue to be a problem.  Without positive equity, owners who get underwater have a lot less incentive to stick around and make payments.  While a down payment isn’t a guarantee of positive equity in the mid-term — prices may drop even farther, and probably will — no-down arrangements make a much higher risk of going underwater down the road.

The answer to the problem is to get government out of the lending business.  Fannie and Freddie should be wound down entirely, and the US government should take a lesson from our neighbors in Canada, who balk at social engineering through taxpayer subsidies and government interventions in the housing markets.  Instead, we’re repeating the same behaviors that created the bubble and the collapse, while telling ourselves that a little insanity isn’t all that harmful.


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It requires $1000.00 down, but the couple profiled in the piece received a grant, and ended up paying just 67 cents for a $115,000 home.

And with the other 33 cents left over, I can buy health insurance.
Live the American dream.

Electrongod on September 14, 2010 at 11:40 AM

Hold on now, that 67 cents put me back, I’m not exactly rolling in money you know.

Bishop on September 14, 2010 at 11:41 AM

This handbasket is scratchy. When can I get out?

TexasDan on September 14, 2010 at 11:41 AM

The Mafia would make better mortgage lenders than the government.

“Don’t pay, I’ll break your legs.”

portlandon on September 14, 2010 at 11:41 AM

And when it all collapses again, it will still be Bush’s fault.

/

Ward Cleaver on September 14, 2010 at 11:41 AM

Next housing bubble set to pop in 2020. That way in the year 2020 we call chuckle at the irony of the comment that “hindsight is 2020″.

Too bad the people in DC cannot learn from past mistakes. We have been down this road before and we all know how it ends.

milwife88 on September 14, 2010 at 11:42 AM

No money down loans are not the problem Cap’n. It’s the underwriting guidelines, or lack there of, that created the bubble.

VA loans and USDA Rural Housing loans are $0 down programs with very low default rates. Both implement strict rules on income qualifying and debt ratios that ensure loan performance.

Don’t throw the baby out with the bath water Ed.

DrW on September 14, 2010 at 11:42 AM

August retail sales up 0.4 pct., best in 5 months (AP) “-

But Ed, didn’t you hear? There’s no chance now of a recession according to AP. Free houses for all….

sandee on September 14, 2010 at 11:43 AM

I bet now, it 67% down!!

canopfor on September 14, 2010 at 11:45 AM

Right now, Fannie is buying up conventional mortgages all over the place. I don’t know what is up, but I suspect they want the 20% down homeowners to subsidize 0% down risky homeowners.

Vashta.Nerada on September 14, 2010 at 11:47 AM

Yeah, (Cal HUD) the agency is CA is also doing down payment assistance. And FHA is also refi’ing homes that are upside down.

Here

Nuts, nuts, nuts. Just let the market place work.

Oil Can on September 14, 2010 at 11:48 AM

It’s not (necessarily) the mortgage, but the fraudulent derived securities that is the problem.

The real problem is there doesn’t seem to be any recourse to charge back to the originator some degree of culpability.

Somewhere along the line, fraud has been committed and escapes any consequence. Either the loan applicant, or the lender, or the derivative marketer, or careless investor. Following the ‘greater fool’ theory, the last one holding the bag suffers the consequences.

Skandia Recluse on September 14, 2010 at 11:49 AM

Right now, Fannie is buying up conventional mortgages all over the place. I don’t know what is up, but I suspect they want the 20% down homeowners to subsidize 0% down risky homeowners.
Vashta.Nerada on September 14, 2010 at 11:47 AM

Even better, no appraisal required and the loan can be up to 125% of what you owe. The douchebags are lining up for that cake.

Bishop on September 14, 2010 at 11:52 AM

Obama will be out of office when this bubble bursts the same way Clinton was out of office when his housing bubble burst. It does create front loaded economic benefits, and Clinton benefited from that. The ones who benefit are those who sell their houses during the inflating of the bubble. It’s another kind of Ponzi scheme. They are importing people from Africa to occupy the houses. Construction increases to build houses in the outer suburbs for those white people who just sold their inner suburban houses. And for a bonus, you can burst the bubble when you want so wait until a Republican is in the White House and time it for maximum damage.

Buddahpundit on September 14, 2010 at 11:54 AM

I saw that this morning. But it’s reminding us of what’s been in the news since Bush warned of the effects from legislated fraud. Ironic since his Treasury Sec. destroyed the American economy and demanded US taxpayers to pay foreign banks. All the while, Bush’s executive order made that and every other Treasury Sec. autonomous, beholden to NO ONE for anything, extending that coverage to the Federal Reserve and global banks that refuse to answer questions in court and before Congress.

maverick muse on September 14, 2010 at 11:54 AM

Cloward-Piven. (cough-cough-cough) Man am I hoarse.

shick on September 14, 2010 at 11:55 AM

So the Mortgage Industry is going to have a Value Menu?

3 Bedroom Ranch………67 cents

4 Bedroom 2 bath……..99 cents

5 Bedroom 2 1/2 bath Beach Front……$1.99

portlandon on September 14, 2010 at 11:56 AM

This is F-ING BULL POOPY!

I am going round and round with the damn back on the freaking closing costs cause I CAUGHT them (I read the WHOLE closing) tacking on fees that even the Title Company said we don’t charge that, on a VA loan! You don’t screw with VA loans!

I waited up until 11 PM last night waiting for the President of the bank to CALL ME BACK concerning his mortgage broker and underwritter.

And these peopel got a grant for the down for a freaking house. UGH… UGGGGHHHH! I am so darn frustrated!

upinak on September 14, 2010 at 11:57 AM

I wonder what Frank would say.

shick on September 14, 2010 at 11:57 AM

Even better, no appraisal required and the loan can be up to 125% of what you owe. The douchebags are lining up for that cake.

Bishop on September 14, 2010 at 11:52 AM

stop.. you are making me so much better/////////

upinak on September 14, 2010 at 11:57 AM

Lately I’ve noticed some signs around Memphis advertising homes “Zero Down/Zero Interest.”

flyfisher on September 14, 2010 at 11:58 AM

And again I feel like a total sap for putting a full 20% down and paying all the closing costs out of pocket instead of rolling it into the 15 year loan.

Sinner on September 14, 2010 at 11:59 AM

And again I feel like a total sap for putting a full 20% down and paying all the closing costs out of pocket instead of rolling it into the 15 year loan.

Sinner on September 14, 2010 at 11:59 AM

LOL you can’t roll it into the loan unless you have outstanding credit… or you are a obama flunky.

upinak on September 14, 2010 at 11:59 AM

Ed, my wife is a MLO for one of the largest banks in America. 99% of her pipeline is some variation of government subsidized product. There is no real estate market beyond these programs. People who can actually afford to buy houses are sitting on their cash and not incurring any new debt. This administration has absolutely convinced a certain segment of the population that they are entitled to these programs and they show up daily demanding “their money”. And I’m not exaggerating that quote.

wtaft on September 14, 2010 at 12:00 PM

continuing from previous remarks (11:49)

The early history of the insurance industry were cases where companies sold large numbers of policies, but when catastrophe stuck, those companies were unable to pay claims, resulting in regulations to govern loss reserves, cash or near cash on hand to pay unexpected insurance claims.

The unregulated banking industry had similar experiences where deposits were lent out to increasingly risky ventures, and the banks faced with sudden demand for deposits did not have cash on hand to pay off that demand, resulting in banking regulations to govern capital reserve requirements.

Why then not regulate the derivatives market with similar cash reserve/loss reserve/capital requirements so that derivatives that do not produce expected returns because of the default of the underlying mortgage do not result in the collapse of the institution holding those instruments?

Skandia Recluse on September 14, 2010 at 12:01 PM

Barney Frank:

Then: “There’s no mortgage crisis.”
Recently: “I was against it from the beginning.”
Today: “This is exactly what our country needs now.”

shick on September 14, 2010 at 12:02 PM

Instead, we’re repeating the same behaviors that created the bubble and the collapse, while telling ourselves that a little insanity isn’t all that harmful.

Good news? Now it’s being done after all the bailouts and legislation designed to “make sure this never happens again” under the watchful eye of the Democrat dominated government.

Bush’s fault in 3..2..1……

SouthernRoots on September 14, 2010 at 12:03 PM

This handbasket is scratchy. When can I get out?

TexasDan on September 14, 2010 at 11:41 AM

You can get out just as soon as we get to hell. Don’t make me pull this handbasket over.

Kafir on September 14, 2010 at 12:04 PM

The financial collapse occurred because housing lenders wrote paper to people who couldn’t afford the houses they bought, often getting a no-down arrangement, while lenders sold the paper to Fannie Mae and Freddie Mac, which securitized them and spread the bubble throughout the financial markets

casually rewriting history again.

actually, private mortgage securitization played a much greater role. fannie and freddie’s market share, which was never more than 20%, declined as the bubble grew around 2004-2006 and private mortgage securitization increased.

sesquipedalian on September 14, 2010 at 12:05 PM

You can’t punish today’s poor for the mistakes of yesterday’s poor. That is why today’s poor must be given the same opportunity to buy a house they can’t afford that yesterday’s poor were given.

Monkeytoe on September 14, 2010 at 12:11 PM

No money down loans are not the problem Cap’n. It’s the underwriting guidelines, or lack there of, that created the bubble.

VA loans and USDA Rural Housing loans are $0 down programs with very low default rates. Both implement strict rules on income qualifying and debt ratios that ensure loan performance.

Don’t throw the baby out with the bath water Ed.

DrW on September 14, 2010 at 11:42 AM

I would like to see the default loans for VA. They have been done for a long time.

There have always been some “creative” solutions to the government requirements on VA loans… like hiking the selling price to include the closing cost… effectively financing the closing costs, because the government required the seller to pay them and that put VA buyers at a disadvantage to sellers.

petunia on September 14, 2010 at 12:13 PM

And again I feel like a total sap for putting a full 20% down and paying all the closing costs out of pocket instead of rolling it into the 15 year loan.

Sinner on September 14, 2010 at 11:59 AM

Think about how I feel – 40% down on a 15 @4, and Fannie is sniffing around my note.

Vashta.Nerada on September 14, 2010 at 12:13 PM

actually, private mortgage securitization played a much greater role. fannie and freddie’s market share, which was never more than 20%, declined as the bubble grew around 2004-2006 and private mortgage securitization increased.

sesquipedalian on September 14, 2010 at 12:05 PM

I’m not an expert on this, so this is a real question. What percentage of the no money down loans and/or the sub-prime loans did Fannie and Freddy securitize. My suspicion would be that those loans are the ones Fannie and Freddy had a high percentage of.

Monkeytoe on September 14, 2010 at 12:14 PM

No money down loans are not the problem Cap’n. It’s the underwriting guidelines, or lack there of, that created the bubble.

VA loans
and USDA Rural Housing loans are $0 down programs with very low default rates. Both implement strict rules on income qualifying and debt ratios that ensure loan performance.

Don’t throw the baby out with the bath water Ed.

DrW on September 14, 2010 at 11:42 AM

BS on VA Loans. You do have to pay… actually I have to pay over 5K and the VA Funding Fee is about 4500. One of the reasons I am having serious issues with this bank.

upinak on September 14, 2010 at 12:15 PM

“The answer to the problem is to get government out of the lending business. Fannie and Freddie should be wound down entirely……..”

Just exactly how do we “wind down” a 13 trillion dollar debt that the Chinese bought as bonds rather than Treasuries (at a better interest rate)?

Rovin on September 14, 2010 at 12:15 PM

The down payment is of course ridiculous, but they’re right about the stricter underwriting if the credit score threshold is really 680.

Blacksheep on September 14, 2010 at 12:16 PM

Did the deed come in a cute red binder with a Hammer and Sickle on the cover ?

ELMO Q on September 14, 2010 at 12:17 PM

Oy vey.

We’ve seen this movie before.

rockmom on September 14, 2010 at 12:19 PM

I wonder what Frank would say.

shick on September 14, 2010 at 11:57 AM

“We muff haf affobable houthing!”

slickwillie2001 on September 14, 2010 at 12:19 PM

I actually live in an area that was ruined by these practices. We had a nice subdivision that a lot of folks sold out to these government subsidized programs at the height of the housing prices. Now, 25% of the houses are foreclosed, the rest of them are literally falling apart because they aren’t taken care of and the some of the properties look like a warzone. You can hear gunfire every few nights. Crime is up. You don’t dare walk out at night unless I’m carrying concealed. Houses which originally listed for $300K are now selling for $150K if they are lucky.

Home ownership is more than just being able to afford living in a house. It means being able to afford the upkeep and more importantly, understanding what it means and takes to be a homeowner. The government can give people houses, it can’t teach them how to be responsible and take care of them. I talk to people who were placed in these homes with no money down, who haven’t made a payment in a few years. They know that they will be evicted, but they don’t care. They understand that the government will have pity on them and put them in another house somewhere else while we here deal with the fallout of a vacant, destroyed house.

I wish to thank the government for ruining our property values and lives.

Mo_mac on September 14, 2010 at 12:20 PM

The down payment is of course ridiculous, but they’re right about the stricter underwriting if the credit score threshold is really 680.

Blacksheep on September 14, 2010 at 12:16 PM

I doubt they will find many takers at 680. Which means that, inevitably, they will drop it to 660, and then to 640, and on and on. This is how we ended up with Fannie and Freddie holding a crapload of loans with scores as low as 550.

Definition of insanity.

rockmom on September 14, 2010 at 12:21 PM

This totally sucks. Truly insanity.

Can we keep it just long enough for me to sell my house?? Plz? I really, really need to move.

di butler on September 14, 2010 at 12:25 PM

Sounds like Barney Frank is rolling the dice one more time.

GarandFan on September 14, 2010 at 12:26 PM

Think about how I feel – 40% down on a 15 @4, and Fannie is sniffing around my note.

Vashta.Nerada on September 14, 2010 at 12:13 PM

That is if they can find the original note. Apparently there are a bunch of mortgages out there where the original loan documents are missing. No one, and I mean, no one has any idea where they went. If I were a mortgage holder that had my note sold more than once in the last 5 years or so, I would be asking the current holder to produce the original signature loan documents, and then see what happens if they can’t.

Johnnyreb on September 14, 2010 at 12:26 PM

I’m not an expert on this, so this is a real question. What percentage of the no money down loans and/or the sub-prime loans did Fannie and Freddy securitize. My suspicion would be that those loans are the ones Fannie and Freddy had a high percentage of.

Monkeytoe on September 14, 2010 at 12:14 PM

We don’t really know, because both Fannie and Freddie lied about how much subprime paper they were buying, and they are still lying. The point, though, is that by buying ANY of them they created a moral hazard that put government backing behind risky loans, many of which involved outright fraud. And they probably violated their charters in doing so. They also forced prices down for all subprime loans, and eventually they were all priced too low to cover even the historic default rate for subprime loans.

The biggest problem was that Fannie Mae was buying almost all of the subprime paper from Countrywide, which was the biggest player in the market. It forced other lenders to lower prices and pay higher and higher commissions to the brokers to keep their market share, which gave the brokers lots of incentives to commit fraud and keep scraping lower and lower in the barrel for borrowers. It became a mad race to the bottom.

I watched all of this unfold within a company that had a big subprime lending operation and a private-label securitization business and competed with Countrywide and with Fannie.

rockmom on September 14, 2010 at 12:28 PM

Now how hard would a 67 cent down payment be to walk away from when these homebuyers don’t want to pay their next house payment? Hmmmm, I want me one of them mortgages.

yoda on September 14, 2010 at 12:29 PM

Why then not regulate the derivatives market with similar cash reserve/loss reserve/capital requirements so that derivatives that do not produce expected returns because of the default of the underlying mortgage do not result in the collapse of the institution holding those instruments?

Skandia Recluse on September 14, 2010 at 12:01 PM

Conflict of interest? Senate legislators who are either invested or looking for campaign donations from Wall Street? It’s my understanding that the Financial Reform Bill did not “forcefully” regulate the derivatives market. Again, it looks like “money talks”.

Rovin on September 14, 2010 at 12:31 PM

That is if they can find the original note. Apparently there are a bunch of mortgages out there where the original loan documents are missing. No one, and I mean, no one has any idea where they went. If I were a mortgage holder that had my note sold more than once in the last 5 years or so, I would be asking the current holder to produce the original signature loan documents, and then see what happens if they can’t.

Johnnyreb on September 14, 2010 at 12:26 PM

There are some bigrtime lawsuits working their way through the courts on this. A couple of smaller cases have already been decided, with judges vacating loans in which the servicer could not produce the actual note proving ownership. It’s scaring the hell out of the industry right now.

The overall sloppiness of this industry over the last 15 years is revolting. It managed to develop a system in which most of the riskiest loans were produced by third-party originators with no financial interest in how the loans performed and who were paid based on the interest rate of the loan, and then the loans were sold repeatedly with little documentation or due diligence on the part of either the seller or the buyer. And a crapload of them ended up on the books of Fannie and Freddie.

rockmom on September 14, 2010 at 12:33 PM

rockmom on September 14, 2010 at 12:33 PM

You know, this is just the sort of thing our Congress could solve if they were qualified for their positions.

Instead, we get both sides electing lever-pullers instead of people with knowledge and experience, then they wonder how stuff like this escapes the idiots they elect.

NoDonkey on September 14, 2010 at 12:39 PM

Here it is in Palm Beach County:

Palm Beach County families gain stability with federal money that spurs buys of foreclosed houses

http://www.palmbeachpost.com/money/real-estate/palm-beach-county-families-gain-stability-with-federal-910555.html

djn on September 14, 2010 at 12:45 PM

Thank you China and foreign creditors buying our debt.

We are slaves to you now, thank you very much.

PappyD61 on September 14, 2010 at 12:49 PM

Hate to be so pessimistic, but I don’t think our country is going to survive. Just too many things moving in the wrong direction.

Mirimichi on September 14, 2010 at 12:53 PM

The definition of insanity is …

not doing the same things over and over and expecting different results. This is a major pet peeve of mine. The definition of insanity is: a deranged state of the mind usually occurring as a specific disorder (as schizophrenia). The commonly quoted definition of insanity could just as easily and misguidedly be applied to the virtue of perseverance.

I know, I know… I’ll go get a life.

samuelrylander on September 14, 2010 at 12:57 PM

You just have to look at this like a liberal would.67 cent downpayments can help the homeless get in a house.It shouldn’t be to hard to pick up 67 cents worth of aluminum cans.Solves 2 problems.Helps the homeless and the environment.

docflash on September 14, 2010 at 1:02 PM

I have people telling me I’m insane for not buying right now. I see loss in housing values, neighborhoods falling apart, an unstable economy. In other words if I buy now I have no guarantee that I can continue to make payments and no guarantee that the house will not become a financial liability or the neighborhood become a war zone.
I’ll continue to rent for awhile; there may be enough like-minded people to put another dent in the housing recovery.

mad scientist on September 14, 2010 at 1:19 PM

This handbasket is scratchy. When can I get out?

TexasDan on September 14, 2010 at 11:41 AM

Three questions: Where does this downhill slope lead to? Why are we going so fast? And why are we in this handbasket?

theCork on September 14, 2010 at 1:44 PM

Too bad the people in DC cannot learn from past mistakes. We have been down this road before and we all know how it ends.

milwife88 on September 14, 2010 at 11:42 AM

Why should they learn from their mistakes? What’s the risks?
Pay raises in the middle of the night? Oh well, if I lose the election, I still have millions in campaign funds and my pension for life.Plus someone will give me a cool lobbying job.

BruceB on September 14, 2010 at 2:19 PM

mad scientist on September 14, 2010 at 1:19 PM

People were saying 2006 was a great time to buy and look how that turned out.

Renting is far less risky, that’s for sure.

NoDonkey on September 14, 2010 at 2:28 PM

BS on VA Loans. You do have to pay… actually I have to pay over 5K and the VA Funding Fee is about 4500. One of the reasons I am having serious issues with this bank.

upinak on September 14, 2010 at 12:15 PM

Upinak, the VAFF can be paid in cash or added to the loan amount. the VAFF varies from 0% (any VA related disability) to 2.25% (1st time user) to 3.3% (repeat user). on a VA IRRRL (rate and term refi) it’s only .5%.

there is NO down payment requirement on a VA loan where the Vet has full entitlement is is not exceeding his county loan limit. ($417k here in Maricopa County, AZ).

Seller’s may pay up to 4% of the SP towards the Vet’s closing costs.

DrW on September 14, 2010 at 2:32 PM

And what has caused the homes to be unaffordably high priced?It couldn’t be the increased demand caused by government subsidizing those who couldn’t afford the houses in the first place,could it?No,it must have been those greedy bankers who held guns to peoples’ heads and forced them to borrow out their equity to buy new cars or invest in more government subsidized real estate.

DDT on September 14, 2010 at 2:34 PM

THE MALFEASANCE MONSTER
Can someone here help me with something…why do all the liberals blame Bush and all the concervatives blame Obama…and NOBODY cites (unless I am wrong) the fact that Bill Clinton’s manipulation of the Community Reinvestment Act is what lead to the housing crisis by Fannie Mae and Freddie Mac providing security cover and Chris Dodd and Barney Frank have their filthy mits all over it (they have yet to be investigated)…AND THE LAW IS STILL IN EFFECT. CHANGE/REPEAL THE STINKING law and returnto the days where the BANKS get to decide whether a persons financial position makes them an acceptable risk. Been paying on a mortgage for 15 years, out of work once, and never missed a payment. Sure bad things happen to good people but why should good people like myself be finacially RAPED via increased taxes by an inept, intrusive, incompetent, ignorant and yes even insidious government.

RedLizard64 on September 14, 2010 at 3:11 PM

Guess the old phrase “I’d buy that for a dollar” needs to be rewritten to “I’d buy that for 67 cents.”

redfoxbluestate on September 14, 2010 at 3:37 PM

Not to worry! They are requiring these “homeowners” to buy mortgage insurance. What could go wrong??

PattyJ on September 14, 2010 at 4:55 PM

Renting is far less risky, that’s for sure.

Don’t be so sure. Your landlord holds a mortgage too… and they send there payments to an escrow account held by a servicer who is supposed to pay the note holder. Somewhere in that chain might be a weak link.

IUnknown on September 14, 2010 at 6:15 PM

All of these dirty commie RATS should be frog marched to the gallows.

byteshredder on September 14, 2010 at 7:25 PM

BS on VA Loans. You do have to pay… actually I have to pay over 5K and the VA Funding Fee is about 4500. One of the reasons I am having serious issues with this bank.

upinak on September 14, 2010 at 12:15 PM

With a VA loan you do not pay points or PMI however closing costs and the VA funding fee is part of the deal.

When I bought my house a couple of years ago I had the seller pay the closing costs and I covered the funding fee.

If the bank is trying to hit you with points/PMI then that is not in scope with a VA loan.

F15Mech on September 14, 2010 at 8:45 PM

I actually live in an area that was ruined by these practices. We had a nice subdivision that a lot of folks sold out to these government subsidized programs at the height of the housing prices. Now, 25% of the houses are foreclosed, the rest of them are literally falling apart because they aren’t taken care of and the some of the properties look like a warzone. You can hear gunfire every few nights. Crime is up. You don’t dare walk out at night unless I’m carrying concealed. Houses which originally listed for $300K are now selling for $150K if they are lucky.

Home ownership is more than just being able to afford living in a house. It means being able to afford the upkeep and more importantly, understanding what it means and takes to be a homeowner. The government can give people houses, it can’t teach them how to be responsible and take care of them. I talk to people who were placed in these homes with no money down, who haven’t made a payment in a few years. They know that they will be evicted, but they don’t care. They understand that the government will have pity on them and put them in another house somewhere else while we here deal with the fallout of a vacant, destroyed house.

I wish to thank the government for ruining our property values and lives.

Mo_mac on September 14, 2010 at 12:20 PM

This^

Ironically, there is a continued demand for new housing construction, albeit small in comparison to a few years ago, in no small part due to so much of the existing, empty housing stock being in neighborhoods brought to ruin by the situation Mo_mac describes.

shuzilla on September 14, 2010 at 8:50 PM

Zero News on Zero Down

You should see some of the nice neighbors you get with these mortgages. Cops at the house at all hours. Breaking into cars belonging to other minority neighbors since they apparently believe they may have drugs. Cut their lawn as often as Democrats support free enterprise. They injure or kill their own pets. Then they live rent free for years by conveying the house to various straw men, sell the fixtures, have a lot of week long parties then trash and try to burn the place when they move out.

And this was in a million dollar neighborhood. Meantime, WaPo ran an article about a poor, female, minority entrepreneur who was hoodwinked into a no down payment adjustable mortgage and was losing her home. My level headed, black buddy was incensed about the “victims” suffering.

I tried to write to The Factor about this but was ignored.

IlikedAUH2O on September 15, 2010 at 8:00 AM