I have been a REALTOR in the State of Minnesota for about seven years. I In that time, I have seen the best and worst in the crazy real estate market. I help about 40-50 people per year find or sell their home. For my second year, I also sit on the MN Association of REALTORs Professional Standards Committee (Hearing ethics complaints and arbitration hearings). I don't think that I have to reiterate that buying a home, for most people, is the largest purchase and often viewed as one of the most secure and honorable investments with trusted financial partners and an expression of willingness to invest in America and American communities.
Is America Thumbing Her Nose At First-Timers?
As you know, that trust and security has been dealt an unhealthy blow due to the lax conditions banks were allowing people to qualify for a home loan under and the shinanigans that have partaken in the process.
1. I understand that the new qualification standards in March '08 put into effect by Fannie Mae and Freddie Mac will mandate that as credit scores go down (from 700), the rate will be tiered and will go up (in like 30 point increments). This is not the way they are currently priced by institutions. Currently, financial institutions compete with each other to provide a fair loan product under the guidelines of the loan products they offer.
Q: How does making qualification ramifications more stringent make it easier for homeowners to pay? How does this help correct the mortgage situation in the institution today? This appears to GRANT SPECIAL PRIVILEGES to those institutions who are dealing the loans... I find this VERY DISTURBING!
2. I also understand that the downpayment assistance programs offered in conjunction with FHA,DVA and CONVENTIONAL loans are under fire. There is no doubt that the downpayments raise the purchase prices of some homes, however, the market has supported these situations. The vast majority of the issues we see today are due to poor education to a qualifying future homeowner, unscrupulous loan officers and mortgage brokers conjuring up false income values for qualification, and placing those clients into extremely high risk loans with a 1-3 year ARM or Balloon provision.
Q: Again, how does eliminating the downpayment assistance for those who truly need it affect all the subprime fallout? I have to ask, WHO IN THE LEGISLATURE IS WATCHING OUT FOR THE INDIVIDUAL? WHO IN THE GOVERNMENT CAN WEIGH THESE RELATIONSHIPS OUT AND SEE THAT THE REAL WINNERS HERE ARE THOSE BANKING INSTITUTIONS WHO HAVE RELAXED THEIR OWN QUALIFICATIONS IN THE MARKET?
Jesse Hopkins-Hoel
jshoel@cbburnet.com
320.761.4621
Tami & Steve / I-94Homes.com
Coldwell Banker Burnet
St. Cloud, MN
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