Interesting discussion, though.

I Agree.

In regards to comment #17, I’m glad to hear that you aren’t opposed to the elimination of 100% LTV loans. The thing that puzzles me is how a good loan officer can have, in today’s market, a deal get surprised by the declining market issue several weeks into the deal? I’ve had a LOT of them, but I’ve done my homework up front, educated customers AT application, and haven’t had any that have blown up because of it.

It’s a matter of understanding the rules and doing the extra homework that it takes to clarify things in advance.

Tom

P.S. Has anyone asked the question – is it really better for consumers to be buying houses with no money down in today’s market?

I have a listing in a zip code that appreciated over 18% from January 2006 – January 2007. FNMA has declared it a “Declining Market”.

Whoever said “kneejerk over-reaction” hit it right on the head.

Now do I think NAR has the right intentions in this issue? I don’t necessarily think so – considering their main objective is to serve its members. But they are correct in pointing out that Fannie wasn’t thinking right when they made the rules changes for declining markets.

Again an issue where we don’t have enough facts to say for sure what the right path should have been. I’ve always been of the opinion that most of the policy makers in Washington these days are flying blind.

This change has the potential to cause a shift in buying patterns in many markets and help speed the recovery.

BTW, any agent that hasn’t seen the direct impact of a city being labeled a declining market and needing an extra 5% down payment it would be impossible for you to understand. This truly is one of those times that you just have to experience it to understand.

Thanks for the opportunity to clear that up. I know that I am more apt to be offended when being called out in a group, than to feel it’s constructive when done one on one.

Matthew — in my opinion, the comments can sometimes draw out just as many good insights and perspectives as the post itself. While it can sometimes become a bit argumentative, the amount of dialogue that follows posts on Agent Genius is one of the reasons it is such an extremely valuable blog/resource/community. So — do what you need to do, but I think engaging in “debates” via the comments adds value!

The problem we’re facing is areas of the country that were preforming take huge hits on guidelines written for the worst hit areas of the country. The last time I checked, there is no ocean or shortage of land in Texas that would create quite the situation Florida, Seattle, or even California has. Panic rules do not solve crisis. Looking into areas on a micro level should be the rule and both fannie and lenders creating a solution that allows sellers to sell (especially those trying to escape resetting loans). I know there is a solution but it’s going to take something more creative than a blanket approach, and that’s why I supported Fannie making this decision.

I have the highest respect for appraisers, but if I’m an appraiser right now, it’s all a declining market- CYA- not CMA?

So, I do apologize for us not knowing each other well enough to pull that off.

However, we still disagree; but in reading you and others on here, I am compelled to see that the principal of “unintended consequences” may be applicable here.

Ok, really I’ll stop now

You say, that the risk has always been there, but in reality, the mortgage system has been built on a foundation for the last 20 years that in most areas and most of the time, property values will at worst stay the same and more likely go up. Negative equity wasn’t an issue for the first 19 years and 6 months of my career but it is a big issue now. That’s shaping a lot of the thinking behind underwriting guidelines these days. In addition to that is the growing perception (I don’t know whether they are facts or just perceptions) that people who don’t have “skin” in the game are more likely to walk from their houses when going gets tough.

As you know well, the game is different than it was 6 months to a year ago and we’re going to have to reevaluate the way that everything gets done.

Thanks for sparking some lively discussions…..

Tom

You tried to diminish me by making it seem as if I was so blind I don’t realize that actions are good.

If you call yourself an educator, please apply the same standard to yourself as you require from others.

Like Chris, I really don’t have more to my argument than this. I look forward to reading others who are more educated on the topic…

I am not one to be threatened by “Taking a shot at me is an ignorant action and you are not stupid, so don’t do that in future arguments with me or others, it coarsens discourse.” trying to bully someone is entirely unprofessional. Are you planning on taking my lunch money?

I’ve written many articles regarding my disagreements with NAR, however in this case I agreed with them and the actions. I fully agree that the ‘now is a good time to buy” campaign is not appropriate, but this issue was a consumer (all be it more the seller) protection issue.

When I read your second comment (after the introduction) I was compelled to ask myself other questions regarding the lenders potential undue risk and other considerations. See, when you take the time to write an argument based on reason and not inflammatory words such as “stupid”, “mugging” and “slimy”, I tend to see it as a healthy debate and not an attack. I’ve read your articulated articles before and would appreciate a “why” to your comments (such as was delivered in the second comment) Whereas the first comment just maked you sound angry but didn’t explain the why or your counter-argument.

In this case we have two different points of view. I see the damages to the Sellers for something that isn’t’ their fault and you see the potential damage to the lender. Either way someone is getting screwed, and only time will tell which is more correct.

I’ve made it a personal policy to not carry on extensive debates by comments any longer, because after awhile it becomes argumentum ad hominem. I honestly would like to know more about the opposing view, so I can be e-mailed at matthew [at] theagenttrainer.com or skyped at matthew.rathbun

Jim – Did I say that? I didn;t mean to – I actually think that even altruists do things because suceeding at helpin gothers makes them feel good, so if I gave that impression, I am sorry. But I don’t believe that they do anything that they believe will harm some segment of our society -

I think there are a couple of issues that this doesn’t address:
1. what are the MI companies going to do?
2. Is this for refis? or just purchases?

My bank (Fifth Third) just went back to requiring a minimum 5% downpayment on fixed rate owner occupied purchases with credit scores of above 680 and no gift funds. I think that’s a sensible compromise.

How much money did Fannie Mae lose the first quarter of this year? I don’t remember but it was in the billions! Do we really want them to get back into making stupid loans?

I want to help people buy homes, it’s how I make a living, but we need to be smart about things.

Tom