Comments on: Media Appearance: KSTP News on Declining Markets

By: Jackson

Jackson — Tue, 26 Feb 2008 12:30:09 +0000

Since an increasing number of borrowers are turning to piggyback loans in order to avoid PMI, the mortgage insurance industry came up with this solution claiming that it lowers monthly mortgagespayments to the same or lower level as a piggyback loan. With this option homebuyers pay a single premium on their insurance and it is amortized over the term of loan.

By: Alex/Editor

Alex/Editor — Tue, 12 Feb 2008 21:02:23 +0000

Well, you’ll get your wish as to the increased down payment requirement, though it will wind up being less than 20% when all is said and done. FHA, for instance, would have to be pried from the cold dead hands of nearly every congressman, and only requires 3% down.

Bigger down payments will make our real estate market healthier over the long term, if at the expense of some short term pain.

Getting philosophical for a moment, our tradition of housing that is accessible to the middle class is one of the reasons that we have not had violent political paroxsyms in our country from time to time (see your Germany and Japan.)

The average person, for the most part, can get a stake in the system, which makes people less apt to march on the capital and lop off heads once in a while.

The pendulum swung too far towards “accessible” into “fog a mirror” and caused values to inflate, pricing out much of the middle. To let that pendulum swing too far in the other direction would be just as damaging.

For many people, saving 50% of any reasonably priced home is just as unattainable as making a payment on one that has been artificially inflated by loose credit standards.

By: raspeberry5

raspeberry5 — Tue, 12 Feb 2008 20:06:35 +0000

I am glad that sanity is returning to the home lending market. We binged in the last five years and now it is hangover time. I hope that 20% down payment becomes the norm. It is 50% in Japan and 40% in Germany, countries where people are thrifty. Enough of this monthly payment mindset.

By: Amy Caron

Amy Caron — Mon, 11 Feb 2008 23:48:33 +0000

This makes me want to ralph.