I was listening to AM radio this morning (ha ha ha; no pun intended) and the reporter was talking about the upcoming anticipated vote on the new mortgage legislation to “fix” the current mortgage crisis. The reporter was speaking with a mortgage broker who essentially said that the legislation will be devastating to his business as it eliminates the “mortgage assistance” provision currently available. He was whining about how of the files on his desk, over half of them would be shut out of the home purchase market because they didn’t have the down payment. Apparently a typical Fannie Mae/Freddy Mac loan requires a 3% down payment. On a $200,000 house, that’s $6,000. This guy is whining about folks who can’t come up with $6,000 to buy a house? Are those folks really in a position to handle a house and all the responsibility that goes with it? Hmmm . . .buying a house when you don’t have the money, buying more house than you can afford—isn’t that how this mess started in the first place? When will the madness stop and how can the potential homeowner make better decisions instead of hoping the government will tell them the right thing to do?
—Lisa Stacholy, AIA, NCARB
Comments (2)
One of the greatest economic boons this country experienced was directly attributable to the GI Bill and the educational assistance and home purchasing assistance this bill provided. Many of us, myself included, probably wouldn't have been able to attend college or buy our first home (VA loans didn't require any down payment) without this assistance. So let's recognize that the current situation has been caused more by predatory lending practices (including inflated appraisals and the desire to generate fees) and less on the abilities of many to make a small down payment.
The real villain here isn’t the poor sod who could barely scrape together the down payment. It was the lender who should never had made that loan to begin with. There was a time when an appraisal actually reflected the true value of a property and when lenders only gave loans to those who had demonstrated the ability to pay the loan over the long term. All of that went by the wayside as lenders, appraisers, developers, and realtors all got together to cook the books and focus on the short term.
So bring on the regulations. But don’t penalize those who can’t scrape together the down payment. Force the lenders to only make loans like they used to: with the long term health for all in mind rather than their desire to generate short term income solely for themselves.
Posted by Bud Dietrich, AIA | July 31, 2008 9:11 PM
Posted on July 31, 2008 21:11
This is a prime reason why the Iniative for Middle Class Design Access needs to move forward. Not only is it concerned with having mortgages acceptable to the secondary market ,including architects fees, it looks at ways architects can participate in the process to provide qualitative analysis of value for homeowners/buyers to reduce risk to them and to lenders. Architects have a lot of skills to assist in preventing the next crises. We have to speak up and get our voices heard and sit at the table when revised regulations are written to see that our skills benefit our society and broaden the market for architects services. Contact the AIA at spp@AIA.org if you want to help.
Posted by Louis Smith, AIA, NOMA | July 30, 2008 10:29 AM
Posted on July 30, 2008 10:29