Do you buy anything that’s cheap(er), figuring that the demand will become unglued and prices continue racing towards the sky – or sit this one out? P.S. Three offers are in on Cherokee, and more expected.
The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.
President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.
In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.
Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.
Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.
Obama pledged in his State of the Union address to do more to make sure more Americans can enjoy the benefits of the housing recovery, but critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars.
“If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute and former top executive at mortgage giant Fannie Mae.
I don’t see how easing mortgage requirements will make more houses available for young people. All it will do is push prices up even more because “crazy” people (those willing to go to the limits of credit availability) will simply go all in. Buying whatever they can with whatever crazy loan they can get.
This is exactly what happened in 2006.
The difference now is that unlike before nobody is being foreclosed on. This means nobody is being forced to sell at a loss.
If gov leaders really wanted to make more properties available for young people they need to start foreclosing again. Unfortunately I know banks don’t want to write down assets and politicians never want to upset any group of voters and that’s why we’re where we are today.
Someone is going to have to change because old people won’t be able to hold onto power forever.
shadash +1
Getting a loan isn’t the problem, at least for us. We refuse to pay bubble prices for a stucco, chicken wire and styrofoam shack!
The government forcing looser lending standards will not cause cheaper houses and it will make things worse!
Prices are too damn high! And many of these houses still need like $100K of work!
Forget that!
We’ll keep renting and saving money!
Will we be priced out forever? History says otherwise!
Or, how about relaxing some of the early withdrawal penalties one has to incur when pulling money out from retirement accounts for first time purchases.