Say Hello to the Next Potential Mortgage Disaster

Paddy, I agree with many of the comments on here, it really makes no sense.

I've read the proposed bill and WTF is their determination of "low" property value?  Is that the listing price?  Seems like this is red-lining entire swatches of areas, which I thought was unethical.  What is their definition of "lower cost dwelling?"  So, let me get this straight . . . a high-risk mortgage loan which is involved in a federally funded program won't be subject to a property appraisal?  HA HA HA  Say HELLO to pieces of shit housing going for whatever greedy, money grubbing scam loan sharks will come up with.   If they REALLY wanted to help some areas that are plagued with "lower cost dwellings" -- which would normally be CASH ONLY terms -- and now put them into the investment loan portfolios, why isn't anyone consulting with a real estate agent on HOW TO accomplish that?  Maybe the Sen. sponsoring this bill is getting his comps from Zillow?

Alright, so we're going to go on another of those little rides, right?

And just whom, ultimately, is going to fund this?  Will this be more foreign/Chinese money coming in?

Insanity, supreme.  We should be tightening, not loosening.

The Wild West of Lending is about to return...this is a proposal that unfortunately screams abuse me!

Anytime an outside force interferes with the free market the "free" is removed and rarely will something good happen.

"They’ve unloaded their toxic assets to the US government and Federal Reserve. They’ve borrowed money at essentially 0% from the Fed and loaned it to the Treasury Department at interest (the mother of all scams)."

You are a rocket Scientist Paddy and can see the light at the end of this tunnel.  Those in Congress drafting this proposal are yet again mucking up our country. The entitled folks just dont get enough to the dteriment of the tax payers.

If Jane and John Q Public did half of the manuvers these folks in power have done, we would go straight to jail without passing go.

Redlining is against the law and now the proposal is to overturn discrimination? 

I respectfully ask that everyone calm down. Many, in fact most Bills that are proposed have no chance of becomming law. One representative submitted this bill and it has no co-sponsors. I do not believe this will ever pass, much less get out of comittee.

It makes for great anti-government rabble rousing, but really, we could use a lot less finger pointing and blaming. I'm sure the author of the Bill has a good reason for propsing it.  Do any of you really think that he sat down and said, "I am going to write a new law that will create a new housing bubble and destroy the economy." 

It is probably a bad idea and it is fine to comment against it, but it shouldn't lead to bashing government.

Bring back no doc stated income loans now!

I, for one, do not see it as government bashing. If this does pass, it will be a potential problem plain and simple.

I would not worry about this.  These days nothing gets by the Senate.

Idiots in charge, voting on or proposing things they have no experience with (ie the Real World).

David Dwares I doubt he 'set down and looked at anything' other than numbers pushed by a donor or political activist. He then asked his polling specialist "How will this look to my core?" Polling specialist said "Do it!" so he did.

The likelihood Mr. Politician has any understanding of what he proposed is nil in my book.

So I looked into the author of the bill.  Blaine Luetkemeyer is a conservative Republican from Missouri.  Apparently he proposed this legislation to assist small community banks so they can lend in their community if they are going to hold the loans for at least 3 years without worrying if an appraisal came in a little low.

It doesn't look like there were polling specialists involved. I do not know if there were any community bank owners (donors?) involved.

I thank Paddy for writing this blog post and drawing our attention to this issue and I feel a responsibility to know the facts before I make a comment.

Unless, of course, I can think of something snarky and witty to say, which in this instance I did not.

Sounds similar to a Fannie Mae Home Path program. No appraisals and lipstick on pig properties bought by unsuspecting lower income buyers. Grrrr

Follow the money.

I can't get up in arms about this.  I think it has little chance of passing and if we got upset over every "proposed" stupid bill in congress we'd have little time to live our lives.  

Of course we've all witnessed congress being stupid before I suppose.  What we should be worried about is the sponsor of the bill and the WHY it was proposed in the first place.  I'm off to dig a little deeper.

We need a long breather without changes to the lending landcape so we can all deal with the latest changes.

Thank you for sharing this information.  It is most informative.

Buyers, sellers and real estate professionals could really benefit from it!

Have a productive week! 

Congress has pretty much ruined this business which its level of absurd regulation.

You said it well, Jeff. Congress no longer serves the people. People who would like to fix it do not want to be part of Congress.