Housing

[charlestudor2005]

Originally Posted by atlcomedy

Did you come up with that all by yourself or did your staff help?

So many retorts, so little time...

[pjorourke]

Originally Posted by atlcomedy

Or how bout California?

Tough to come up with a single point # in Georgia because there is an exemption on the first x $'s of appraised value but if you have a nice house you are pushing 2% of appraised value...

+8% sales tax

+ a state income tax

And with all of those taxes, they are still flat assed broke.

[Rudyard K]

Originally Posted by WTF

Things are not good here in Texas....we have a huge shortfall and this Gov is in a pickle of his own choosing.

No they are not rosey.

Originally Posted by WTF

He lowered property taxes with a promise that businesses would make up the difference....that has not come to fruitation, just as our comptroller at the time said they wouldn't.

Uh, sorry...but there is no state property tax in Texas. Property taxes are assesed at city, county and school district levels...and most all in tax rates run (unlike the previous poster's comment) run normally from 2.5% to 2.8%. And such rate is generally after the taxing authority has granted a homestead exemption (exempting from taxation a certain percentage of the value of a single family home) to single family homeowners.

Originally Posted by WTF

Things are not rosy down here as our slick Gov tries to make out.

I don't like the guy either...and kind of like a stock broker whose only claim to fame is that he only lost you 5% when the market was down 10%...no one likes the news. But, I'm not sure I've heard him say things are rosey...just they they aren't as bad as elsewhere...and frankly, they're not.

[WTF]

Originally Posted by Rudyard K

Uh, sorry...but there is no state property tax in Texas. Property taxes are assesed at city, county and school district levels...and most all in tax rates run (unlike the previous poster's comment) run normally from 2.5% to 2.8%. And such rate is generally after the taxing authority has granted a homestead exemption (exempting from taxation a certain percentage of the value of a single family home) to single family homeowners.



.

But the reality is that the state is not giving school districts $$$ , because this business model did not pan out, just like the critics said it would not.

Therefore districts (at least down in my neck of the woods) are thinking about recinding that exemption and laying off teachers.

Now that might be a good thing or not but the above comments are just the facts.

[Rudyard K]

Originally Posted by WTF

But the reality is that the state is not giving school districts $$$ , because this business model did not pan out, just like the critics said it would not.

Therefore districts (at least down in my neck of the woods) are thinking about recinding that exemption and laying off teachers.

I was simply adressing your comment that the Gov lowered property taxes. He did not.

But I have no doubt that your school district...and lots of them...are struggling under falling revenues. But our school funding plan (Robin Hood) was fought over a decade ago or so, and the fight ended in the mid-90's. We really have Mr. Cornyn to thank for that (he was the swing vote on the Texas Supreme Court that said Robin Hood was legal).

The state needs additional revenues...but there can be no state property tax, or a state income tax, without a vote of the people...and there ain't nobody...dem or pub...lib or conserv...gonna push that. That's in our state constituion. Sales tax is already at 8+%. Rasing fees and such is about all that's left.

Like I said...I'm no fan of our Gov here (even though I am a fan of his alma matter. )...but about the only thing that is going to be reworked during this session...is the business franchise tax. There is a fair amount of opportunity there.

[WTF]

Originally Posted by Rudyard K

I was simply adressing your comment that the Gov lowered property taxes. He did not.

.

I realize we are talking word play but the picture is quite clear. State law translates in local law.

http://www.mysanantonio.com/news/politics/article/Average-homeowner-still-waiting-for-that-2-000-720991.php

Gov. Rick Perry had just signed a school finance reform bill into law in May 2006 when he bought radio and TV announcements touting a $2,000 property tax cut for the average Texas homeowner.
In 2006, property tax rates were lowered by one-third, which saved taxpayers more than $16.4 billion," Miner said. "Progress was made. More needs to be

[TexTushHog]

Two changes would fix the housing bubble and prevent it from happening again.

1. Require 20% down on any home purchase.

2. Make the bank that originated the loan keep it on their books. All home loans are non-transferable. Period. Eat what you sell.

[WTF]

Originally Posted by TexTushHog

Two changes would fix the housing bubble and prevent it from happening again.

1. Require 20% down on any home purchase.

2. Make the bank that originated the loan keep it on their books. All home loans are non-transferable. Period. Eat what you sell.

Hey TTh...why just stop at cutting off the head, go for the heart too and eliminate the home interest mortgage deduction

[Can I Play Too???]

Originally Posted by Nina Rae

I disagree, I think it would strengthen the market. To me, it seems, what has helped ruin the market is allowing people to acquire mortgages on homes with little to no down payment. They all ended up with ARMs or huge monthly obligations they could not meet. In my state, that's translated into tons of properties back on the market within a couple of years because of defaulted obligations. Had the requirements been more strict, then we wouldn't be looking at for sale signs on every corner here and forclosure listings a mile long.

I think that you are making a case in point for Tiff on less credit being beneficial to the housing market.
In addition, foreclosures are also due to people losing their jobs. Fact: There has been a loss of around 50,000 manufacturing jobs each month since China joined the WTO in 1991. Don't even get me started on the BLS and their u-3 and U-6 numbers because if you don't receive benefits after your 99 weeks or find part time work, then you are no longer considered "unemployed".


Some stats on the states' budgets for next year:
State Projected FY 2012 deficit (in millions)
Deficit as percent of 2011 spending
Rank by percent
Nevada $1,500 45.20 1 *
New Jersey $10,500 37.40 2 *
Texas $13,400 31.50 3 *
California $25,400 29.30 4 *
Oregon $1,800 25.00 5 *
Minnesota $3,800 23.60 6 *
Louisiana $1,600 20.70 7 *
New York $10,000 18.70 8 *
Connecticut $3,200 18.00 9 *
South Carolina $877 17.40 10 *

Pennsylvania $4,200 16.40 11 *
Vermont $176 16.30 12 *
Washington $2,500 16.20 13 *
Maine $436 16.10 14 *
Florida $3,600 14.90 15 *
Illinois $4,900 14.60 16 *
Mississippi. $634 14.10 17 *
Alabama $979 13.90 18 *
Colorado $988 13.80 19 *
Virginia $2,000 13.10 20 *
Wisconsin $1,800 12.80 21 *
North Carolina $2,400 12.70 22 *
Arizona $974 11.50 23 *
Rhode Island $331 11.30 24 *
Ohio $3,000 11.00 25 *
South Dakota* $127* 10.90 26 *
Maryland* $1,400* 10.70*27* *
Oklahoma $500. 9.40 28 *
Nebraska $314 9.20 29 *
Kentucky. $780 9.10 30 *
Missouri $704. 9.10 31 *
Kansas $492 8.80 32 *
New Mexico $450. 8.30 33 *
Hawaii $410 8.20 34 *
Utah $390 8.20 35 *
Georgia $1,300 7.90 36 *

[Rudyard K]

Originally Posted by TexTushHog

Two changes would fix the housing bubble and prevent it from happening again.

1. Require 20% down on any home purchase.

2. Make the bank that originated the loan keep it on their books. All home loans are non-transferable. Period. Eat what you sell.

I was talking about a reasoned reponse...I guess I should have been more clear.

As far as number 1...I tend to agree that the primary mortgage (the one where there might be some kind of Gov kiss to help enhance our economy...if that is something society views as a thing that needs to be done) needs to be in the 20% equity range. Any traunches above such 80% loans need to be treated differently and not have any kind of Gov kiss...and considered "high risk", for regulatory exam purposes, if in a bank portfolio.

As far as number 2...that's just foolishness. First, banks don't really make many of the loans. Mortgage brokers typically close the loan into a warehouse line, that is the borrowings of the broker...or a backer of the broker. Once that warehouse line achieves a certain level (i.e. $25MM or $50MM or something like that) the pool of loans is sold to an ultimate set of investors. The homeowner (borrower) gets a committment from the broker to fund the loan...the broker already has a committment from investors (or his backers) to fund a pool of loans.

All FMae, FMac, Jmae should have done was standardize loan docs so that the mortgages were fungible. If society wanted to have these agencies kiss the paper to make them a little more fungible?...because that fungibility served society's goals of job enhancement?...then the Gov should only be kissing the paper to the extent it was a 20% equity loan (or pehaps even higher equity). But they got into kissing all sorts of paper...no matter what the risk profile...and that bit them in the ass.

Much like the FDIC was formed to build confidence in the banking system so that the normal joe depositors didn't get taken to the cleaners?...the pseudo gov agencies could serve to stablize a mortgage lending system for the benefit of society. But they instead started running the agencies like a business...to try and make money...instead of serving their constituancy...society...and society's goals of a broad job base.

[atlcomedy]

Originally Posted by TexTushHog

Two changes would fix the housing bubble and prevent it from happening again.

1. Require 20% down on any home purchase.

2. Make the bank that originated the loan keep it on their books. All home loans are non-transferable. Period. Eat what you sell.

Originally Posted by Rudyard K

I was talking about a reasoned reponse...I guess I should have been more clear.

As far as number 1...I tend to agree that the primary mortgage (the one where there might be some kind of Gov kiss to help enhance our economy...if that is something society views as a thing that needs to be done) needs to be in the 20% equity range. Any traunches above such 80% loans need to be treated differently and not have any kind of Gov kiss...and considered "high risk", for regulatory exam purposes, if in a bank portfolio.

As far as number 2...that's just foolishness. First, banks don't really make many of the loans. Mortgage brokers typically close the loan into a warehouse line, that is the borrowings of the broker...or a backer of the broker. Once that warehouse line achieves a certain level (i.e. $25MM or $50MM or something like that) the pool of loans is sold to an ultimate set of investors. The homeowner (borrower) gets a committment from the broker to fund the loan...the broker already has a committment from investors (or his backers) to fund a pool of loans.

All FMae, FMac, Jmae should have done was standardize loan docs so that the mortgages were fungible. If society wanted to have these agencies kiss the paper to make them a little more fungible?...because that fungibility served society's goals of job enhancement?...then the Gov should only be kissing the paper to the extent it was a 20% equity loan (or pehaps even higher equity). But they got into kissing all sorts of paper...no matter what the risk profile...and that bit them in the ass.

Much like the FDIC was formed to build confidence in the banking system so that the normal joe depositors didn't get taken to the cleaners?...the pseudo gov agencies could serve to stablize a mortgage lending system for the benefit of society. But they instead started running the agencies like a business...to try and make money...instead of serving their constituancy...society...and society's goals of a broad job base.

I think the question is are we talking about an ideal state or something that practically be done.

Of TTH's 2 points, practically, #1 scares me a heck of lot more than #2. Requiring 20% would kill valuations and liquidity in a housing market that probably hasn't reached a bottom.

#2, or some variation thereof, isn't so far off; not that I necessarily advocate it. Just because it is different than how we currently do things doesn't mean we can't change. In fact it wasn't too many years ago that most mortgages were held by the originator or if sold, sold once.

[Rudyard K]

Originally Posted by atlcomedy

In fact it wasn't too many years ago that most mortgages were held by the originator or if sold, sold once.

Uh, that's not really right. The loans were generally "serviced" by one party...and such servicing rights were not transferred to another servicer near as much as they are now. As such, it appeared to the borrower, that he paid his note to one person forever. S&L's also made these type loans and they did tend to hold onto them.

But the "servicer" simply collects the payments, pursues late payments, handles the foreclosure (if necessary), etc...and collects a fee from the investor for doing so. The economic interest in the loan was generally held by a fund such as the California Teachers Pension Fund, insurance companies, etc. Those pools of loans were not as fungible as they are today because of standardized loan docs, FMae, Fmac, etc...but they were defintely traded among the various funds. I can't speak from knowledge prior to the 60's or so...but that how it was done back that far...and that's 50 years.

[Camille]

Originally Posted by TexTushHog

Two changes would fix the housing bubble and prevent it from happening again.

1. Require 20% down on any home purchase.

2. Make the bank that originated the loan keep it on their books. All home loans are non-transferable. Period. Eat what you sell.

I was wondering where you had disappeared to TTH.
And Mazo...where is he hiding?

Nina, thanks

C xx

[TexTushHog]

Originally Posted by WTF

Hey TTh...why just stop at cutting off the head, go for the heart too and eliminate the home interest mortgage deduction

Not a problem for me. But I think that subsidy pales in comparison in terms of contributing to the financial instability of the housing market when compared to the other two. When I bought my second home, we just paid cash when we looked at how little it would save to deduct the interest. It just wasn't worth the trouble. I'm going to do the same on a lake house I'm buying later this year or early next year.

Also, I certainly think that we should cap the amount of interest that you can deduct in any year and limit it to only one home per taxpayer.

Originally Posted by Rudyard K

As far as number 2...that's just foolishness. First, banks don't really make many of the loans. Mortgage brokers typically close the loan into a warehouse line, that is the borrowings of the broker...or a backer of the broker.

But banks used to make all of the loans and can again. Having a situation where the people who originate the loan have no interest in the credit worthiness of the buyer is a horrible problem. Make the company that lends the money keep the loan. You will see lending standards tighten up to where they were thirty years ago. And that would be a good thing.

Camile, I've been working quite a bit. Then I took almost a week's vacation when one of the cases I was working on settled right before trial. The week that we had blocked off for trial was open and I don't get many large blocks of open time, so I headed out of town.

[Guest083011]

Originally Posted by OliviaHoward

It's called a Stated Income loan. I state how much I make. The investor "believes" it - undocumented. I've seen it done.

Originally Posted by atlcomedy

Kinda funny story...when I bought my first home years ago I took out an equity line because I was making significant improvements. I asked the mortgage broker what kind of documentation did I need? Plans, bids, receipts? and he laughed at me(the point being no documentation was necessary, I could have gone and bought lottery tickets for all he cared)

No docs loans or "fog the mirror" test. If you were alive and could breath and fog the mirror, you got a loan. The only exception was a ham sandwich could not get a loan.

Originally Posted by Rudyard K

Yep...and today those same folks are now figuring out that such "mortage broker" was not really qualified to assess what they could afford. He/she could only really tell them what they qualified for under some set of qualification rules.

The front line mortgage guys knew who could and could not make it happen. Those guys wanted to improve their numbers by all the closings and transactions completed.

Originally Posted by TexTushHog

Two changes would fix the housing bubble and prevent it from happening again.

1. Require 20% down on any home purchase.

Some banks are pushing 25% with great credit. Bad FICO? You're "fooked" to quote a certain poster.

Originally Posted by Camille

I was wondering where you had disappeared to TTH. And Mazo...where is he hiding?C xx

Speaking of which. Hi, Camille!!!