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Old 02-12-2018, 11:00 PM   #21
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I think you're just noticing the ads now. They've been back on at least since I retired in 2013.
Lots of bad idea tv ads on in the daytime from schools that are terrible to financial schemes. Anyone have a structured settlement but need cash now?
I have noticed the drug companies pay for the evening news and the lawyers suing drug companies pay for the noon news.
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Old 02-13-2018, 12:26 AM   #22
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Here in the SF Bay Area people are getting FHA loans with 3% down...
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Old 02-13-2018, 05:04 AM   #23
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+1 on The Big Short. I think 10 years ago the problem was more the CDO's than the stretch loans per se. If the people granting the loan have to hold it they will evaluate the borrowers more.
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Old 02-13-2018, 05:11 AM   #24
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They're just ads. Could just be a bait and switch. "Oh madam, the 100% mortgage only applies to certain customers. Those in your situation may wish to look into our other offerings..."

I get dozens of ads for walk-in tubs, stair-climbing chairs, gigantic underwear (who even knew there was such a thing as an "MM" brassiere?) and old folks' homes. Doesn't mean I qualify

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Originally Posted by ShokWaveRider View Post
I thought one could not get a 100% mortgage anymore which is why I brought it up. I thought one had to have some sort of a down payment. Like in Canada you now need to have 20% I think. I know the US would not get that radical, but 5-10% is reasonable IMHO.

Would it not be inviting trouble giving a 100% mortgage? Especially in a rising interest environment and on a balloon type mortgage?
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Old 02-13-2018, 05:25 AM   #25
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What got us into trouble before was giving mortgages to dogs and dead people without checking first.
Back in 1999, at a certain point in time our house closing was in 3 weeks. My family and I went to Ireland for a week. When we got back, the closing was over. The realtor said the rates were going up, the buyer couldn't afford the newer rates and so she (the realtor) signed all the paperwork for me and closed the house.

Now it's a totally different story. If my identity ever gets stolen, the loan company is the first place I would look; they know more about me than I do.
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Old 02-13-2018, 08:50 AM   #26
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+1 on The Big Short. I think 10 years ago the problem was more the CDO's than the stretch loans per se. If the people granting the loan have to hold it they will evaluate the borrowers more.
Went looking for The Big Short movie (already read the book) on Prime but it's not free so I watched Too Big To Fail instead. Excellent perspective on the financial crisis of 08 from a broader perspective than just the housing component. Still, one of the best simple explanations of the intersection between mortgages and investment banking that was a major component of the crisis.
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Old 02-13-2018, 08:57 AM   #27
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+1 on The Big Short. I think 10 years ago the problem was more the CDO's than the stretch loans per se. If the people granting the loan have to hold it they will evaluate the borrowers more.
Ten years ago NPR's "This American Life" produced a program called "The Giant Pool of Money." While the program certainly pointed fingers of guilt, it also noted one phenomenon in the global economy that set the stage for the risky loans, fraudulent CDOs and ultimately the financial collapse: The sum of investable money worldwide had doubled between 2000 and 2008.

Investors, both retail and institutional, were hungry for yield as a result ... and many were willing to turn a blind eye to the risk they had to assume to achieve it. That produced an opportunity for the ethically pliable in the financial industry, and they took advantage of it.

The program is a great piece of journalism. It's an hour long, but a transcript is available online: https://www.thisamericanlife.org/sit...transcript.pdf
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Old 02-13-2018, 09:02 AM   #28
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I think variable rate mortgages are a bigger problem than 100% mortgages. That said, I do think there should be a minimum down payment requirement of at least 5%. I haven't seen anything to think we are heading toward another financial crisis but can't know for sure.
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Old 02-13-2018, 09:11 AM   #29
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Funny how we can change the subject so quickly and waffle on about movies and books that "Really" do not have anything to do with what I was asking / observing.

I am just concerned that there "May" be a bunch of folks out there that can be convinced to "bite off more than they can chew" with respect to a home loan. Especially Veterans and those that are being offered 100% mortgages. It was the Phrase "Your House/Home is your Bank" That got me concerned. There are a lot of Gullible people out there, and there are plenty more than are looking to take advantage of them.
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Old 02-13-2018, 09:19 AM   #30
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In all fairness, I bought my first home with a VA mortgage ($25 down payment). I couldn't have bought any other way, and it was a very good thing for me.
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Old 02-13-2018, 09:21 AM   #31
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Originally Posted by ShokWaveRider View Post
Funny how we can change the subject so quickly and waffle on about movies and books that "Really" do not have anything to do with what I was asking / observing.

I am just concerned that there "May" be a bunch of folks out there that can be convinced to "bite off more than they can chew" with respect to a home loan. Especially Veterans and those that are being offered 100% mortgages. It was the Phrase "Your House/Home is your Bank" That got me concerned. There are a lot of Gullible people out there. and there are plenty more than are looking to take advantage of them.
Of course. And there are always real estate brokers trying to convince home buyers they can afford to spend more on a house than they can pay for comfortably. There are traps at every turn.
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Old 02-13-2018, 09:27 AM   #32
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When we first came to the USA in 1989 and purchased our first home. We had no real established credit, even though we moved from Canada to Southern California. We both had good jobs and salaries for those days, a healthy bank account by comparison to most, but still had to find 20% in order to get a mortgage. It was OK for us because we had the cash from a home sale in Canada. But it was still tight as homes in SoCAL were quite expensive by our standards.
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Old 02-13-2018, 09:27 AM   #33
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Originally Posted by ShokWaveRider View Post
Funny how we can change the subject so quickly and waffle on about movies and books that "Really" do not have anything to do with what I was asking / observing.

I am just concerned that there "May" be a bunch of folks out there that can be convinced to "bite off more than they can chew" with respect to a home loan. Especially Veterans and those that are being offered 100% mortgages. It was the Phrase "Your House/Home is your Bank" That got me concerned. There are a lot of Gullible people out there, and there are plenty more than are looking to take advantage of them.
Actually, what "got us into trouble" was what Mr. Graybeard posted previous to your post. Financial imbalances led to too much money in financial institutions and not enough low risk borrowers. It's not the amount of the mortgage so much as it is the credit worthiness of the borrower. That does not seem to be the case today, at least in mortgages.
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Ten years ago NPR's "This American Life" produced a program called "The Giant Pool of Money." While the program certainly pointed fingers of guilt, it also noted one phenomenon in the global economy that set the stage for the risky loans, fraudulent CDOs and ultimately the financial collapse: The sum of investable money worldwide had doubled between 2000 and 2008.

Investors, both retail and institutional, were hungry for yield as a result ... and many were willing to turn a blind eye to the risk they had to assume to achieve it. That produced an opportunity for the ethically pliable in the financial industry, and they took advantage of it.

The program is a great piece of journalism. It's an hour long, but a transcript is available online: https://www.thisamericanlife.org/sit...transcript.pdf
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Old 02-13-2018, 09:35 AM   #34
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The next crisis probably won't be housing-related. Wall Street will have found something new to lose all of their borrowed money on.

We'll probably find out soon that AIG has been insuring trillions of dollars worth of bets on the leveraged VIX products, and is now insolvent again.
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Old 02-13-2018, 09:47 AM   #35
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... Like in Canada you now need to have 20% I think. I know the US would not get that radical, but 5-10% is reasonable IMHO.
Personally, I think 20% is a reasonable down payment.

I'm expecting a lot of flack for that statement. I know what I think, and why. I'd be interested to hear other perspectives.
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Old 02-13-2018, 10:35 AM   #36
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Personally, I think 20% is a reasonable down payment.



I'm expecting a lot of flack for that statement. I know what I think, and why. I'd be interested to hear other perspectives.


My first house was 10% down, but was even less as we rolled all closing costs into the mortgage.
Second house was about 20% down.
This house was less than 20% down as the second house took to long to sell.
Each time I was under 20% I had to add PMI to the mortgage payment. That insurance payment was high enough that I can't imagine the underwriter would have trouble meeting payouts and was sure an incentive to get to 20% paid off ASAP.
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Old 02-13-2018, 10:44 AM   #37
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Regarding the OP, that was the last crash. From my rudimentary view, bubbles precede crashes. It seems as if every bubble is different. So what will the bubble be this time?
Some 'economists' say that excessive tax cuts cause bubbles. I guess we will see.
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Old 02-13-2018, 10:45 AM   #38
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They're just ads. Could just be a bait and switch. "Oh madam, the 100% mortgage only applies to certain customers. Those in your situation may wish to look into our other offerings..."

I get dozens of ads for walk-in tubs, stair-climbing chairs, gigantic underwear (who even knew there was such a thing as an "MM" brassiere?)
I think that stands for majestic mammaries. Congrats!
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Old 02-13-2018, 11:04 AM   #39
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I had an alternate notion, but thought better of it...either way, I do not qualify...

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I think that stands for majestic mammaries. Congrats!
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Old 02-13-2018, 11:13 AM   #40
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First house 10% down, no PMI on CFD
2nd house 10% down no PMI + govt credit
3rd house 10% down PMI for 2yrs.

edit, I had like 60k cash for the third home, but was glad I left a buffer. 2 brand new car payments, brand new 400k home, rolling fast and furious in IT with first kid on the way and boom laid off without severance.

that was four years ago. Things have changed drastically. debt free, well on way to 2 comma! IT recruiters don't stop calling.
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