New Fannie Mae plan to expand home ownership

[Clocker]

I think I saw this movie before.

Fannie Mae wants to make it easier for working-class and multigenerational households to get a mortgage.

The mortgage-finance company said Tuesday it would roll out a program this year that lets lenders include income from nonborrowers within a household, such as extended-family members, toward qualifying for a loan.



http://www.powerlineblog.com/archives/2015/08/exposing-our-fannie-again.php

[baconswitchfarm]

I think I saw this movie before.



http://www.powerlineblog.com/archives/2015/08/exposing-our-fannie-again.php



Just save up and jump in when the bubble burst. Then get rich while listening to how the banks made these bad loans. When all the while the government made them use their dumb super low standards again. Great plan. :bang:

[Actor]

I think I saw this movie before.Fannie Mae wants to make it easier for working-class and multigenerational households to get a mortgage.The mortgage-finance company said Tuesday it would roll out a program this year that lets lenders include income from nonborrowers within a household, such as extended-family members, toward qualifying for a loan.Does this mean I can let my children include my income on their application to improve their chances of getting approved?

[Tom]

We used to call that co-signers, but I suspect this time there is nothing to bind them to paying.

[baconswitchfarm]

We used to call that co-signers, but I suspect this time there is nothing to bind them to paying.

That is correct. You can use a relatives income to qualify but they won't be responsible. Think there might be some fraud ? :lol:

[Tom]

What could go wrong?

[johnhannibalsmith]

Does this mean I can let my children include my income on their application to improve their chances of getting approved?

I'm guessing that it depends upon what the definition of a household is by their standards. If I had to guess based on the premise that it would include all income from adults (including dependents) within a defined residence. But seeing how it seems geared towards allowing a household construct that might include a representative from each of three generations for example - and the goal presumably might be to allow 2 or more low income individuals to move out of temporary low income housing to a common residence - then perhaps this version of 'household' is a presumptive household defined by the applicants who may or may not be living together. Sounds nice and a noble goal, but with only about two sentences from the source to go by, its easy to let your imagination run wild with all the pitfalls of even more creative application processes geared towards those that will invariably get creative.

Edited: here, this sheds a little more clarity than the original one: http://www.wsj.com/articles/fannie-mae-unveils-mortgage-program-to-help-minority-borrowers-1440522064

[Robert Goren]

Donald Trump walks away from real estate deals all the time when conditions change it is no longer a good deal for him. Why should we expect any less from the average home owner?

[Tom]

Donald Trump walks away from real estate deals all the time when conditions change it is no longer a good deal for him. Why should we expect any less from the average home owner?

Because you owe money on it.

[AndyC]

Donald Trump walks away from real estate deals all the time when conditions change it is no longer a good deal for him. Why should we expect any less from the average home owner?

The average homeowner should and does do what Trump does. Given the recent favorable tax treatment of walking away, they are rewarded for doing so. In California, many homeowners who made purchases with little or nothing down simply quit making payments on their loans when they realized that their free spin wasn't going to enrich them. Instead of moving out of the homes they kept living in them for free until legal action would force them out. So they got another free ride for up to 2 years.

[Jeff P]

This story is still one of my all time favorites...

Saying Yes, WaMu Built Empire on Shaky Loans:
http://www.nytimes.com/2008/12/28/business/28wamu.html?pagewanted=all&_r=0

SAN DIEGO — As a supervisor at a Washington Mutual mortgage processing center, John D. Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling stockbrokers’. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes.

Yet even by WaMu’s relaxed standards, one mortgage four years ago raised eyebrows. The borrower was claiming a six-figure income and an unusual profession: mariachi singer.

Mr. Parsons could not verify the singer’s income, so he had him photographed in front of his home dressed in his mariachi outfit. The photo went into a WaMu file. Approved.



-jp

.

[whodoyoulike]

What!!!

I've tipped those guys.

[Robert Goren]

Because you owe money on it.That does not stop Trump! Try reading one of his books and he explains the process, sort of.

[Clocker]

That does not stop Trump! Try reading one of his books and he explains the process, sort of.

I doubt Trump has read one of his books. :p

[boxcar]

What could go wrong?

:lol: :lol: :lol: :lol: But I bet you really meant say, "What could POSSIBLY go wrong"?

[elysiantraveller]

I get the logic of allowing multigenerational households pooling income. It does make sense. I think the overall problem here for both Fannie and the Feds is the issue of IRS treatment. Since they can't file for a household tax revenue is lost if they all were allowed to be on the loan. I haven't heard much about the program but if it requires significant money down I guess I don't really see a problem with it. Plus this can be offset and underwritten with PMI.

Not really a huge deal if you require a large down payment and/or hefty PMI premiums.

[baconswitchfarm]

Not really a huge deal if you require a large down payment and/or hefty PMI premiums.


Huge down payments :lol: The government is trying to get people a house that can't get one now. No down payment will be more likely.