Homeownership hits 18-year low amid more renters

[Freewill]

And what has been in effect for those 18 years? The Community Reinvestment Act which was suppose to INCREASE home ownership. One place this trend is not taking place is in Washington where they take our money and apparently have plenty of it.

Homeownership hits 18-year low amid more renters

Homeownership hits 18-year low amid more renters - Phoenix Business Journal

Homeownership in the U.S. slid to an 18-year low as housing prices begin to climb and industry officials fear people may be locked out of buying.

Bloomberg reported roughly 65 percent of Americans own a home, down from a high of 69.2 in 2004.

The market, particularly in Arizona, has instituted tougher requirements for home buyers in recent years to try to stem losses that occurred during the Great Recession.

 

[Mad Scientist]

The Community Reinvestment Act which was suppose to INCREASE home ownership.

But only for a short while.

See, as long as Bankers have control over the Economy and the Money Supply, they are able to create Boom and Bust cycles. The Boom begins when the Money supply is expanded and Lower Interest Rates makes money cheap and so you borrow more of it and spend it (Banks were Investing during this time). You take out Equity loans on your home and re-fi for a 30 year term.

Then the Bust Cycle begins!

Expansion slows, Credit is Tightened, Your Job is Shipped Overseas because of a Free Trade Agreement you applauded.

Now the US is a Service Economy (May I serve you Sir?) NOT a Manufacturing Economy (See Free Trade Agreement above) Minimum Wage isn't going to pay all your bills so now you have to get out of your house and rent, no possible way of ever owning a home again.

Who benefits from all that? The Bankers!

They wrote all the Loans so now they own virtually EVERYTHING and they Foreclose on EVERYONE!

See, America HAD sovereign control over it's Money supply until 1913 when the Federal Reserve Act put that control into the Hands of Unelected Bankers.

 

[Mad Scientist]

The Community Re-Investment Act was a gift to the Bankers, that's all.

 

[zeke]

You two have no idea what the Community Reinvestment Act was for and why it came about.
Furthermore, the idea of educating you would be a waste of my time and you wouldn't believe me anyway.
I only worked in the mortgage industry for 18 years and had to deal with the CRA requirements all the time.

Suffice it to say that the mortgage brokers were not governed by CRA requirements. Matter of fact, if a lender had no branches accepting deposits from an area, CRA didn't really apply to them either.

CRA's intention was that IF a bank accepted deposits from a geographic area, then they were obligated to make loans available in that same area. You still had to qualify and you still had to be underwritten and so forth.

Thats a COMMUNITY REINVESTMENT ACT. The act of a bank using their local deposit base to reinvest in that community. Hell even banks in affluent areas had to comply with that act. But mostly it was to keep a bank from accepting poor areas money then redlining the area and not making loans.

And you all have a problem with that I see. Like I said. A waste of my time.

 

[Sallow]

The Community Reinvestment Act which was suppose to INCREASE home ownership.

But only for a short while.

See, as long as Bankers have control over the Economy and the Money Supply, they are able to create Boom and Bust cycles. The Boom begins when the Money supply is expanded and Lower Interest Rates makes money cheap and so you borrow more of it and spend it (Banks were Investing during this time). You take out Equity loans on your home and re-fi for a 30 year term.

Then the Bust Cycle begins!

Expansion slows, Credit is Tightened, Your Job is Shipped Overseas because of a Free Trade Agreement you applauded.

Now the US is a Service Economy (May I serve you Sir?) NOT a Manufacturing Economy (See Free Trade Agreement above) Minimum Wage isn't going to pay all your bills so now you have to get out of your house and rent, no possible way of ever owning a home again.

Who benefits from all that? The Bankers!

They wrote all the Loans so now they own virtually EVERYTHING and they Foreclose on EVERYONE!

See, America HAD sovereign control over it's Money supply until 1913 when the Federal Reserve Act put that control into the Hands of Unelected Bankers.

There's some validity to this.

Although I am not as down on the Fed as you.

Removing Glass Steagall assured the return to boom and bust.

 

[Freewill]

You two have no idea what the Community Reinvestment Act was for and why it came about.
Furthermore, the idea of educating you would be a waste of my time and you wouldn't believe me anyway.
I only worked in the mortgage industry for 18 years and had to deal with the CRA requirements all the time.

Suffice it to say that the mortgage brokers were not governed by CRA requirements. Matter of fact, if a lender had no branches accepting deposits from an area, CRA didn't really apply to them either.

CRA's intention was that IF a bank accepted deposits from a geographic area, then they were obligated to make loans available in that same area. You still had to qualify and you still had to be underwritten and so forth.

Thats a COMMUNITY REINVESTMENT ACT. The act of a bank using their local deposit base to reinvest in that community. Hell even banks in affluent areas had to comply with that act. But mostly it was to keep a bank from accepting poor areas money then redlining the area and not making loans.

And you all have a problem with that I see. Like I said. A waste of my time.

First of all I thought the requirement was that those Banks with FDIC insurance were regulated by the law.

Second, I don't really know your experience so I can't comment on that. But let's say the whole idea was to reinvest in areas where they took money. There is a reason they didn't invest in the first place, because it was bad business. So make bad loans bundle them with some good and sell them. As I recall that is what caused the crash of 2008. Don't really remember all the details.

 

[squeeze berry]

perhaps many people have come to realize that home ownership is not the great investment touted by the housing industry and the feds.

When I was single and rented I maxed out both my 401K and IRA and still had money left over for buying bonds, putting money into a credit union account, buying stocks and some left over for discretionary spending.

Now that I'm a DINK and have a mortgage, everything goes into our money pit.

Unfortunately landlords have caught on and renting is not as much as a bargain as it used to be.

 

[DGS49]

"Owning" a home may not be the wisest choice for everyone. There are many valid reasons why an individual or family may decide that it's not for them.

For example, I would like to buy a townhouse to live in after I retire (2-3 years), but prices are so inflated now ($/ft2) that it simply makes no sense.

Having fewer home-owners COULD just be a matter of people making rational decisions about their own circumstances and needs.

 

[Sallow]

You two have no idea what the Community Reinvestment Act was for and why it came about.
Furthermore, the idea of educating you would be a waste of my time and you wouldn't believe me anyway.
I only worked in the mortgage industry for 18 years and had to deal with the CRA requirements all the time.

Suffice it to say that the mortgage brokers were not governed by CRA requirements. Matter of fact, if a lender had no branches accepting deposits from an area, CRA didn't really apply to them either.

CRA's intention was that IF a bank accepted deposits from a geographic area, then they were obligated to make loans available in that same area. You still had to qualify and you still had to be underwritten and so forth.

Thats a COMMUNITY REINVESTMENT ACT. The act of a bank using their local deposit base to reinvest in that community. Hell even banks in affluent areas had to comply with that act. But mostly it was to keep a bank from accepting poor areas money then redlining the area and not making loans.

And you all have a problem with that I see. Like I said. A waste of my time.

 

[Sallow]

You two have no idea what the Community Reinvestment Act was for and why it came about.
Furthermore, the idea of educating you would be a waste of my time and you wouldn't believe me anyway.
I only worked in the mortgage industry for 18 years and had to deal with the CRA requirements all the time.

Suffice it to say that the mortgage brokers were not governed by CRA requirements. Matter of fact, if a lender had no branches accepting deposits from an area, CRA didn't really apply to them either.

CRA's intention was that IF a bank accepted deposits from a geographic area, then they were obligated to make loans available in that same area. You still had to qualify and you still had to be underwritten and so forth.

Thats a COMMUNITY REINVESTMENT ACT. The act of a bank using their local deposit base to reinvest in that community. Hell even banks in affluent areas had to comply with that act. But mostly it was to keep a bank from accepting poor areas money then redlining the area and not making loans.

And you all have a problem with that I see. Like I said. A waste of my time.

First of all I thought the requirement was that those Banks with FDIC insurance were regulated by the law.

Second, I don't really know your experience so I can't comment on that. But let's say the whole idea was to reinvest in areas where they took money. There is a reason they didn't invest in the first place, because it was bad business. So make bad loans bundle them with some good and sell them. As I recall that is what caused the crash of 2008. Don't really remember all the details.

That's not true.

In NYC alone the CRA was responsible for the revitalization of many blighted areas.

 

[zeke]

You two have no idea what the Community Reinvestment Act was for and why it came about.
Furthermore, the idea of educating you would be a waste of my time and you wouldn't believe me anyway.
I only worked in the mortgage industry for 18 years and had to deal with the CRA requirements all the time.

Suffice it to say that the mortgage brokers were not governed by CRA requirements. Matter of fact, if a lender had no branches accepting deposits from an area, CRA didn't really apply to them either.

CRA's intention was that IF a bank accepted deposits from a geographic area, then they were obligated to make loans available in that same area. You still had to qualify and you still had to be underwritten and so forth.

Thats a COMMUNITY REINVESTMENT ACT. The act of a bank using their local deposit base to reinvest in that community. Hell even banks in affluent areas had to comply with that act. But mostly it was to keep a bank from accepting poor areas money then redlining the area and not making loans.

And you all have a problem with that I see. Like I said. A waste of my time.

First of all I thought the requirement was that those Banks with FDIC insurance were regulated by the law.

Second, I don't really know your experience so I can't comment on that. But let's say the whole idea was to reinvest in areas where they took money. There is a reason they didn't invest in the first place, because it was bad business. So make bad loans bundle them with some good and sell them. As I recall that is what caused the crash of 2008. Don't really remember all the details.

First, yes banks have FDIC coverage for depositor funds. Not sure where you are going there.

You might be confused about what different functions a bank, a mortgage banker or a mortgage broker played in the housing market.

Banks were and are still, to the best of my knowledge operate under CRA requirements.
Mortgage Bankers do not because usually the mortgage bank does not have any branch banking network accepting deposits from clients.

Accepting money in the form of deposits to the bank is the trigger.

Mortgage brokers were the unregulated, no holds barred, anything goes mortgage lender of the housing collapse. Mortgage brokers could make whatever type of loan they could conceive and sell. They got paid at closing, had no further responsibility to the loan after it closed. Of course the loan was packaged and sold in the secondary market without any one seemingly doing due diligence for loan quality standards. Because brokers had no standards.

And mortgage brokers surely did not have ANYTHING to do with CRA requirements. There wasn't even a CRA disclosure in their loan packages.

No, if you look you will see that many many regional banks operating under CRA law, never entered into the crazy lending that went on and consequently those banks didn't have to be bailed out. They still had loan standards that they enforced. The huge banks and Fannie and Freddie both got to greedy and failed us all.

The heads of Fannie and Freddie should have gone to jail. Both of those agencies USED to have the highest integrity in the housing market. Now. Not so much.

But it wasn't CRA's fault.

 

[Freewill]

You two have no idea what the Community Reinvestment Act was for and why it came about.
Furthermore, the idea of educating you would be a waste of my time and you wouldn't believe me anyway.
I only worked in the mortgage industry for 18 years and had to deal with the CRA requirements all the time.

Suffice it to say that the mortgage brokers were not governed by CRA requirements. Matter of fact, if a lender had no branches accepting deposits from an area, CRA didn't really apply to them either.

CRA's intention was that IF a bank accepted deposits from a geographic area, then they were obligated to make loans available in that same area. You still had to qualify and you still had to be underwritten and so forth.

Thats a COMMUNITY REINVESTMENT ACT. The act of a bank using their local deposit base to reinvest in that community. Hell even banks in affluent areas had to comply with that act. But mostly it was to keep a bank from accepting poor areas money then redlining the area and not making loans.

And you all have a problem with that I see. Like I said. A waste of my time.

First of all I thought the requirement was that those Banks with FDIC insurance were regulated by the law.

Second, I don't really know your experience so I can't comment on that. But let's say the whole idea was to reinvest in areas where they took money. There is a reason they didn't invest in the first place, because it was bad business. So make bad loans bundle them with some good and sell them. As I recall that is what caused the crash of 2008. Don't really remember all the details.

First, yes banks have FDIC coverage for depositor funds. Not sure where you are going there.

You might be confused about what different functions a bank, a mortgage banker or a mortgage broker played in the housing market.

Banks were and are still, to the best of my knowledge operate under CRA requirements.
Mortgage Bankers do not because usually the mortgage bank does not have any branch banking network accepting deposits from clients.

Accepting money in the form of deposits to the bank is the trigger.

Mortgage brokers were the unregulated, no holds barred, anything goes mortgage lender of the housing collapse. Mortgage brokers could make whatever type of loan they could conceive and sell. They got paid at closing, had no further responsibility to the loan after it closed. Of course the loan was packaged and sold in the secondary market without any one seemingly doing due diligence for loan quality standards. Because brokers had no standards.

And mortgage brokers surely did not have ANYTHING to do with CRA requirements. There wasn't even a CRA disclosure in their loan packages.

No, if you look you will see that many many regional banks operating under CRA law, never entered into the crazy lending that went on and consequently those banks didn't have to be bailed out. They still had loan standards that they enforced. The huge banks and Fannie and Freddie both got to greedy and failed us all.

The heads of Fannie and Freddie should have gone to jail. Both of those agencies USED to have the highest integrity in the housing market. Now. Not so much.

But it wasn't CRA's fault.

The hook the government puts into banks and such concerning CRA is if they are covered under FCIC. Thus as you said the mortgage broker would not be covered under CRA.

 

[Freewill]

perhaps many people have come to realize that home ownership is not the great investment touted by the housing industry and the feds.

When I was single and rented I maxed out both my 401K and IRA and still had money left over for buying bonds, putting money into a credit union account, buying stocks and some left over for discretionary spending.

Now that I'm a DINK and have a mortgage, everything goes into our money pit.

Unfortunately landlords have caught on and renting is not as much as a bargain as it used to be.

the money you put into rent is gone. If you choose wisely the money you put into your home should pay back with interest. My home has double in about 21 years. I just wish I would have bought a more expensive house.

 

[Freewill]

From Slate:

What Caused the Economic Crisis?

The only near consensus is on the question of what triggered the not-quite-a-depression. In 2007, the housing bubble burst, leading to a high rate of defaults on subprime mortgages. Exposure to bad mortgages doomed Bear Stearns in March 2008, then led to a banking crisis that fall. A global recession became inevitable once the government decided not to rescue Lehman Bros. from default in September 2008. Lehman's was the biggest bankruptcy in history, and it led promptly to a powerful economic contraction. Somewhere around here, agreement ends.

The 15 most persuasive explanations for the economic crisis. - Slate Magazine

 

[zeke]

Freewill, are you now saying that you understand that the CRA requirements did nothing to cause the housing collapse?

And wouldn't you want the Federal agency insuring a banks deposits to have some sort of standards applied to the bank? Or would you rather have the FDIC bailing out failed banks because there was no oversight and regulations?

 

[g5000]

It is truly amazing to me the CRA meme is still going around as one of the causes of the crash. Truly amazing. That is one of the more ridiculous urban legends out there.

Bear Stearns, Lehman Brothers, Goldman Sachs, JP Morgan, Morgan Stanley, UBS, Royal Bank of Scotland, Allied Irish Bank, Bank of Ireland, Spanish banks, Icelandic banks; all had fuck-all to do with the CRA. None were under the CRA's jurisdiction. This was a global derivatives boom, not just sales to negroes. All those houses which foreclosed in your neighborhood and your town, did Biff look like a negro to you? All those friends of yours who took out HELOCs, maybe even YOU took out a HELOC; were they all negroes? And was it the negroes of Iceland which brought down their banks?

As for home ownership dropping...good! The only people buying houses should be the ones who can afford them.

When you stop the banks from giving big loans to anyone with a pulse, then OF COURSE you are going to see home buying drop.

 

[zeke]

Hey Free. When I wrote loans for a living and the sub prime loans started being marketed by large numbers of brokers, the originators that I worked with absolutely KNEW that bad loans were being made and that these borrowers would default. It was only a matter of when the default would occur.

SO if the regular loan officers KNEW what was coming, I always think it cute when supposed experts on the loan crisis chime in (like slate), Or some bank CEO claims HE didn't know those loans were bad.

Once Glass Steagal was lifted, allowing everybody to make mortgage loans, the race to make the worst loans imaginable was on.

 

[g5000]

Hey Free. When I wrote loans for a living and the sub prime loans started being marketed by large numbers of brokers, the originators that I worked with absolutely KNEW that bad loans were being made and that these borrowers would default. It was only a matter of when the default would occur.

SO if the regular loan officers KNEW what was coming, I always think it cute when supposed experts on the loan crisis chime in (like slate), Or some bank CEO claims HE didn't know those loans were bad.

Once Glass Steagal was lifted, allowing everybody to make mortgage loans, the race to make the worst loans imaginable was on.

Yep. They knew. From late 2005 forward, the broker-dealers knew very well what they were doing was mainlining poison into our global economic system.

It was not so much the lifting of Glass-Steagall, which certainly was a factor with respect to Citigroup, it was the complete deregulation of financial derivatives in the Commodity Futures Modernization Act which put the bubble on steroids here at home.

 

[AceRothstein]

The CRA has been around for 36 years. Nothing to do with home ownership hitting an 18 year low.

 

[zeke]

It is truly amazing to me the CRA meme is still going around as one of the causes of the crash. Truly amazing. That is one of the more ridiculous urban legends out there.


As for home ownership dropping...good! The only people buying houses should be the ones who can afford them.

When you stop the banks from giving loans to anyone with a pulse, then OF COURSE you are going to see home buying drop.

Problem is that people owning their home is good for all of us. Neighborhoods stabilize, consumer spending on items for the home goes up, neighborhood pride goes up, market values increase and the families net worth should go up.

And it was not "banks" that were giving every swinging dick in the world a loan.

Actually, from speaking with friends still in the industry, the loan standards that swung so lenient have now gone the other way and you have to jump through every hoop that the lender can put in front of you to get a loan.

That's overkill. Then of course you have a lot of people who can't qualify for ANY kind of mortgage loan. Bad credit, no down payment, greatly reduced income, foreclosure in the past, etc etc.

Then there is the problem from the sellers side of the transaction slowing sales because of appraised values.

Most of Americans net worth is/was tied up in their home. That equity was the basis of the feeling of wealth. Would allow Americans to spend money more freely. But those days are gone for awhile.

But it would be better for all if the home ownership rate was climbing instead of falling. IMO.