Name:	lotowner -	Reply
Subject:	Congress Intellect
Date:	7/10/2010 7:29:21 AM

 In  a bid to stem taxpayer losses for bad loans guaranteed by federal

 housing   agencies Fanny Mae and Freddy Mac, Senator  Bob Corker (R-Tenn)

 proposed that borrowers be required to make a 5% down payment in order

 to qualify. His proposal was rejected 57-42 on a party-line vote

 because, as Senator Chris Dodd (D-Conn) explained, "passage  of such a

 requirement would restrict home ownership to only those who can afford it."

If I remember correctly, in the 60s and 70s a GI Bill loan required 10%; a FHA, 20%; and a conventional, 30%. In addition, you had to have a job and proof of the down payment, And we wonder why we are in a "He&& of a Mess". 

Name:	MAJ USA RET -	Reply
Subject:	Congress Intellect
Date:	7/10/2010 10:12:47 AM

Yes, my first home purchase (1978 under GI loan) required me to make a 15% down payment AND the mortgage and escrow could not be greater than 25% of my income.  It took two weeks to get my credit approved (first time home buyer).

Name:	MAJ USA RET -	Reply
Subject:	Now!
Date:	7/10/2010 3:41:12 PM

Hound, you are so correct.  It's all about having it now instead of saving and planning. 

The availability of too much credit and not enough accountability caused a heady euphoria which could not be sustained.  When the Executive and Legislative bodies of the mid-nineties removed the impediments to irresponsible home ownership, unworthy borrowers were allowed access to mortgages.  The same risky mortgages were then traded like commodities until origins and true values were obscured.  Not only did the real-estate bubble burst, but financial institutions found themselves holding properties having values far below the principle owed by borrowers who could not pay. 

The massive and asymptotically climbing government debt sucks money out of the private market and redistributes it, after taking a cut for government management, to doubtful endeavors and social programs.  The rich don’t care - they can avoid paying taxes.  The poor feel entitled.  The middle class - the payers of taxes - cannot support this.

Whole communities now find themselves awash in abandoned properties.  Residing among abandoned homes which become increasingly dilapidated, forces a situation where those remaining cannot hope to cash in their declining equity to escape the housing blight.  Hope now changed to misery.