Perhaps the BEST B1G Forum anywhere, here at College Football Fan Site, CFB51!!!

ok once again I ask if the fee goes to the lender what prevents the lender from adjusting his normal rate down to zero out the additional fee

Because the lights don't stay on themselves.

The cause of it was that house prices fell.

Obviously they fell because they were artificially high (a bubble). And they were artificially high because they were giving loans to people who probably shouldn't have loans, which goosed housing demand.

But from 2007-2010, if house prices hadn't fallen, the lenders would have been fine. They wouldn't have to cover short sales or complete foreclosures because borrowers could simply sell the home for above the value of the loan.

A loan with 90% LTV is only risky for the lender if house prices fall.

Is this the Biden administration trying to give lenders a boost because they know that house prices are going to crater soon?

1. Exactly.

Fannie Mae Eases Credit To Aid Mortgage Lending - The New York Times (nytimes.com)

2. Soon? They already are coming down.

I'll never forget 2007/2008.

Almost put me out of business. We went from 30+ people to 3 people.

But nobody in DC cares about us and those 30+ people who were out of work, with no jobs open.

wasnt the main problem in 2007/2008 that loans were being made to shouldnt have been

2. Soon? They already are coming down.

They seem to be coming down in very high-cost areas, and stable or possibly still increasing in low-cost areas, according to national reports. You'd think that with economic headwinds and high interest rates, affordability would cause prices to drop.

But the big issue is lack of inventory. Prices aren't really dropping here in MV (a very high-cost area) because nobody is selling anything. For a little while I was seeing slight price drops, as houses stayed on the market a while, but now there's just nothing available. 

Unless something happens that forces people to sell, I feel like everyone who currently owns is just trying to ride it out. Because it's not like there's anything on the market they can buy if they want to move either. 

We are doing a lot of work for Lennar. I hope it doesn't come to a stop, but we also don't have all of our eggs in that basket. We diversified our client base.

In 2007 we had 32 large (100-1000 lots) subdivisions on the books.

One by one, they all got cancelled over a 6 month period. And we had nothing to do.

The main problem in 2007/2008 was that from 2003-2006, loans were being made that shouldn't have been.

Everyone at the time knew it, but with mortgage-backed securities and credit default swaps, everyone assumed that they were risk-free and that someone else would end up holding the bag if it crashed. But a widespread bubble collapse ended up being a system-wide failure.

thats what I thought

I thought steps were taken to avoid that in the future

todays decrease in prices IMHO is just a reflection of our economy and is much more natural then back then

this built in interest tax wont do anything as long as lenders can still adjust their base interest rate to remain competitive

The housing market is still stupid tight here in MSP for want of inventory at any level. We are looking to sell and move. The only reason something doesn't sell is if there is something seriously wrong with the house (I've seen a few like this on the metro fringes, and I suspect it will require septic tank replacement or somesuch).

I am not worried at all about selling our house at the price point we are looking at, it's buying what we're looking for that's hard. Anything listed now won't be there when we finally get the go ahead to start seriously looking.

sellers market