Home Financing Ninja

This is a directed response to "USDA: The New Subprime Lender", A Blog written by Vince McEveety on Aug 30th

I wanted to say first of all, I waited four whole days before I commented on this.

It seems to me that Vince completely disagrees with 100% financing for someone or anyone.  The basic message I got was that the less skin one has "in the game" the more likely they are to default on the mortgage. 

Then as I read thru the comments section there were several comments that stood out in regards to whether 100% PLUS financing was a good or bad thing.  Of course, this is just one more reason why the market crashed!

Again, this is my understood synopsis -- So here is my response!

Apparently 45 other people did.

So I will be number fourty six -- And I wanted to address certain aspects and comments

First of all, USDA, FHA, VA ALL (yes, all three of them) have a 100% PLUS Financing product.  So who really is to blame.  Is it the Government?  Is it the borrower?  Is it the Banks who loaned the money?  Is it the economy?  Or is it (wait here is a "shocker") THE MEDIA?

It is a combination of all of the above.  But I blame mostly the media who had the hype of the negative amortization and balloon payment loans that were not fully explained to clients.  I mean why would someone really believe that a 1.99% Rate Mortgage actually help them in the long run.

Yes, some borrowers were to blame by being steered to and accepting these types of loans.  But I also think that the media, government, banks also are not with out fault.  In fact, I personally dont see how the national licensing system is going to keep this from happening in the future.  It is flawed to begin with (but I will save that for another post)

So for the record - I wanted to address why VA loans have such a low failure rate -- Because most of those borrowers are in the military.  Default on something (including credit cards or student loans) as a member of the military and trust me -- Those people in trench coats come and have a conversation with you in a back room.  Or worse yet (trust me when I say this) the service-member's direct chain of command gets involved (thats really bad and unpleasent)

But although that product, along with FHA Zero Down Payment Home Loans in Tampa, Florida and the USDA loan are 100% PLUS financing products.  All required VERIFIED INCOME.  As for "skin in the game" I can go to my local, state or federal government and get down payment assistance - Or to a relative (or someone else who "has a vested interest in [me] the borrower, such as a fiance {not on the loan} or an employer" according to HUD 4155).  I have to agree with Cory (response #41) and Greg (response #31) - There are way too many changes in external factors such as higher healthcare costs, higher fuel prices, higher utilities in the home and loss of job for two plus years that even the borrower with high credit score with reserves did not expect (but again, it is all the mortgage person's fault, a statement I have heard time and time again!)

Over half of us in society (and I am sure that this number is more than half among the real estate industry professionals) live paycheck to paycheck.  One major event such as a sickness, accident, significant time of work, and most of us would be homeless.

Do you want to change the negative image of the housing industry.  All it takes is EVERY realtor putting their "skin in the game" and getting ONE person to buy a home that otherwise was not in the market. 

Stop complaining about the government and their programs.  We, as a society, approved these programs. If you dont like what is going on in your capitol or in Washington DC - Then Be Informed and Make a Change and Vote in/out those people who don't have skin in the game. 

Until our leaders stop spending more than what they are making, how will the rest of society change.

LEAD BY EXAMPLE