Hey CR, any of the big & hot states moving that direction?
I mean MA & GA have some homes but the others... IA, ID, MT, NH & WY? My guess is OC alone has more real estate valuation than all those states combined.
I didn't realize that states have the option of adopting these guidelines.
How upset will the depository institutions get, if these are not adopted nationwide? All subprime and exotic loan business will then be diverted from banks like Citibank and WellsFargo, to lenders like ECC and Option One.
dryfly, my guess is all 50 states will be on that list shortly. But this shows it takes some time for a guidance to be adopted.
The CSBS told me before the release: "To be honest, releasing guidance of this type is relatively new for CSBS. ... This working group is finalizing our guidance and deciding upon the best manner to distribute the guidance to the states."
So this is somewhat of a new process for the CSBS and AARMR.
Best Wishes.
MD's insane homebuyer assistance program has income limits of over $100,000 and home value limits of over $500,000, and clearly states that their IO loan programs (which they push heavily and even utilize as a "lifeline" product) for underwater homebuyers with incomes up to the above limits) qualify the borrower using the interest-only payment. Scroll about 3/4 of the way down this page to see the statement. I wonder if this will change.
CR, in some states the regulators may not have authority to adopt it and enforce it, so state legislatures would have to pass enabling legislation.
Also, in CA I know there are multiple first-time homebuyer assistance programs that violate the guidelines. I don't expect this to really go into effect in more than half the states.
Yep - the CA state-funded CALHFA program for first-time buyers offers a 35 year fixed rate loan with 5 years of IO payments for 80% and a 10-year ARM for the 20%. I almost got one last year (dodged that bullet). Buyers are, of course, qualified based on the start payment, not the final one.
I don't expect this to really go into effect in more than half the states.
So this begs the question - I live near the border of two states. If one of the states enacts the guidance and the other doesn't - can I go to a bank in the state that doesn't regulate as tightly and get a frankenloan from them even though my property is in the other more regulated state?
What is to stop that?
Or maybe even a state far away, not bordering my state? Say I live in MA who just enacted regs following the guidance... can I take out a loan from an 'originator' in say Florida which hasn't and get my frankenloan there?
Or maybe even outside the country - say at a bank in the Caymans, or a branch office of the PBoC in Shanghai?
I mean how does this stop the flow of liquidity from leaking in? Is there anyway to stop it?
Hey CR, any of the big & hot states moving that direction?
I mean MA & GA have some homes but the others... IA, ID, MT, NH & WY? My guess is OC alone has more real estate valuation than all those states combined.
I didn't realize that states have the option of adopting these guidelines.
How upset will the depository institutions get, if these are not adopted nationwide? All subprime and exotic loan business will then be diverted from banks like Citibank and WellsFargo, to lenders like ECC and Option One.
dryfly, my guess is all 50 states will be on that list shortly. But this shows it takes some time for a guidance to be adopted.
The CSBS told me before the release: "To be honest, releasing guidance of this type is relatively new for CSBS. ... This working group is finalizing our guidance and deciding upon the best manner to distribute the guidance to the states."
So this is somewhat of a new process for the CSBS and AARMR.
Best Wishes.
MD's insane homebuyer assistance program has income limits of over $100,000 and home value limits of over $500,000, and clearly states that their IO loan programs (which they push heavily and even utilize as a "lifeline" product) for underwater homebuyers with incomes up to the above limits) qualify the borrower using the interest-only payment. Scroll about 3/4 of the way down this page to see the statement. I wonder if this will change.
CR -
Is this just a paper tiger or does this have any bite to it?
Atlanta_Renter, I really don't know. It may be somewhat of CYA exercise if (when) the housing market really gets ugly - or it may have some bite.
I just don't know.
Best Wishes.
CR, in some states the regulators may not have authority to adopt it and enforce it, so state legislatures would have to pass enabling legislation.
Also, in CA I know there are multiple first-time homebuyer assistance programs that violate the guidelines. I don't expect this to really go into effect in more than half the states.
Yep - the CA state-funded CALHFA program for first-time buyers offers a 35 year fixed rate loan with 5 years of IO payments for 80% and a 10-year ARM for the 20%. I almost got one last year (dodged that bullet). Buyers are, of course, qualified based on the start payment, not the final one.
I don't expect this to really go into effect in more than half the states.
So this begs the question - I live near the border of two states. If one of the states enacts the guidance and the other doesn't - can I go to a bank in the state that doesn't regulate as tightly and get a frankenloan from them even though my property is in the other more regulated state?
What is to stop that?
Or maybe even a state far away, not bordering my state? Say I live in MA who just enacted regs following the guidance... can I take out a loan from an 'originator' in say Florida which hasn't and get my frankenloan there?
Or maybe even outside the country - say at a bank in the Caymans, or a branch office of the PBoC in Shanghai?
I mean how does this stop the flow of liquidity from leaking in? Is there anyway to stop it?
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