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redfox
2-11-11, 11:16pm
http://www.nytimes.com/2011/02/12/business/12housing.html?hp=&pagewanted=all

Interesting article about housing finance reform.

Lainey
2-12-11, 2:54pm
I knew some reform had to happen. The banks used Fannie and Freddie as a dumping ground for their sub-prime mortgages.
http://www.zcommunications.org/fannie-mae-freddie-mac-by-jack-rasmus

However I don't wish to see affordable mortgages be left up to the whims of private industry either. Hoping to see a middle-ground solution ..

janharker
2-12-11, 7:04pm
I don't like the idea of losing fixed-rate mortgages.

ljevtich
2-12-11, 8:40pm
I don't like the idea of losing fixed-rate mortgages. Might be a pain, but who lives in a home for 30 years now? I think there might still be fixed rates but not the 30 year. I do think the prices of homes will go down which makes sense, they got too high.

I mean, come on, my DH and I bought a house in 1998 (brand new no less) for $287K. We sold it in 2007 for $567.5K! Almost 300K in 9 years, unheard of, yet so many others got WAAAAYYY too much for their homes. We just thanked our lucky stars that the folks would offer so much. A half of a million dollars for a three bedroom home! NO WAY! Our thoughts were, let's sign as quick as possible before they change their mind and why are they crazy for paying this but they are! They should have paid less. It is older now. I think it is now on Zillow prices at $500K now.

Spartana
2-14-11, 4:40pm
I do think the prices of homes will go down which makes sense, they got too high.


You got out when the gettin' was good! I wasn't so lucky and sold my mountain house after the crash but actually broke even (had paid cash) so didn't fret to much about it. But I agree, I think prices will start to creep up slowly so I am now one of those in the market - but no hurry. In this area of SoCal prices still seem to be falling. The median home price was $650K in 2007 and now is $405K (Orange County, CA.). Of course I'm going to buy in a place in a different area of SoCal with MUCH lower prices - less than $150K, down from about $300K. It's still hard for me to believe that houses, crappy little 1,000 sf ranch style homes that are 50 years old, are still selling for over $400K, let alone went for over $600K just a few years ago. YIKES and YIKES again!

jp1
2-16-11, 11:57pm
I knew some reform had to happen. The banks used Fannie and Freddie as a dumping ground for their sub-prime mortgages.
http://www.zcommunications.org/fannie-mae-freddie-mac-by-jack-rasmus

However I don't wish to see affordable mortgages be left up to the whims of private industry either. Hoping to see a middle-ground solution ..

And I don't like the idea of the government artificially propping up the price of houses. If not having a gov't backstop means houses aren't worth as much as they've been in the past then that's fine. Although I will feel at least moderately bad for all the people who bought houses whose prices had this inflated value assumption built in, as someone who has long thought housing prices were overpriced and thus never bought a house, getting the gov't out of the game and letting prices settle to a more realistic place seems like a good idea. The idea that everyone should OWN a house seems silly to me. There's nothing wrong with renting, and for plenty of people (many of whom have been financially F***ed by the subprime crisis) it's a much better option. The reality is that with today's inflated house prices many people who have "bought" a house don't ever come close to actually owning it. They're simply renting it from the bank. Without the luxury of being able to move at the end of a year's lease if things aren't workign out for them or if their life circumstances change.

My SO and I definitely fall into the class of people who can "afford" to "buy" a house. But because we live in an expensive city our monthly costs would be almost $1500 more if we bought a place comparable to the one we rent. So we rent and put the difference in cost away for the future. Without the gov't support of the house purchasing market I imagine we'd probably have bought by now.

RosieTR
2-19-11, 12:53pm
As a homeowner who would like to sell a house, of course anything that makes it more difficult to sell is going to feel like a negative for me personally. As someone who probably should have rented but was sucked into buying by a few different factors, I can see where renting might make a lot more sense for many people. Neighborhoods with a lot of rentals sometimes tend to be less stable...but neighborhoods gutted by foreclosures aren't exactly great either. Renting can be a hassle if you have pets, like to garden, or want to make long-term plans for a home (such as energy improvements, etc). I know as a landlord we wouldn't put in the same quality of appliances and such for renters because there's a bigger risk of them being broken and less chance of a return on the investment. When planning landscaping, you go with boring and easy. Why plant fruit trees if you're a renter since you might not see any fruit, and why put them in if you're a landlord since you then might have tenants complaining about rats/squirrels/raccoons/pigeons/etc?
As for the structure of the country, it will be interesting to see if home ownership drops a lot more than it already has. Are current homeowners prepared to be landlords? Will companies form to buy and rent out the houses since the market for individual homeowners will drop? Will that cause a shift of capital from a middle class public to fewer wealthier individuals who own said companies? Will it prevent housing collapses the likes of which we are struggling through right now? A lot of the protections and advantages created and supported by the government in favor of middle-class homeowners were the result of bank abuses during the Great Depression. Perhaps those went too far, especially in the last couple of decades. However, I would hate to see the "baby thrown out with the bathwater" so to speak, because swinging the other way would potentially further the funneling of money from the middle class into the hands of wealthy few who have increasing political power.