Who can truly afford a home in Irvine?

NEW -> Contingent Buyer Assistance Program
jvna said:
How can parents that don't know what it's like to earn your own keep teach their kids how to go out into the world and make a life for themselves?
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Sorry but this sounds like a lot of envy.  Why do you think that these parents who got their houses paid from by their parents arent working hard and trying to build something greater?  Work ethic and value of money is really independent of being rich or poor.

Also inheritance is a foreign concept in my community.  Rather than pass your wealth when you die, parents pass it down when their kids actually need it. 
 
rkp said:
jvna said:
How can parents that don't know what it's like to earn your own keep teach their kids how to go out into the world and make a life for themselves?
Click to expand...

Sorry but this sounds like a lot of envy.  Why do you think that these parents who got their houses paid from by their parents arent working hard and trying to build something greater?  Work ethic and value of money is really independent of being rich or poor.

Also inheritance is a foreign concept in my community.  Rather than pass your wealth when you die, parents pass it down when their kids actually need it. 
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I'm basing my comments on these types of people that have their parents take care of them as adults.

homer_simpson's quote "(They don't work, don't need to when they get an allowance from their parents at age 28+)"
 
jvna said:
rkp said:
jvna said:
How can parents that don't know what it's like to earn your own keep teach their kids how to go out into the world and make a life for themselves?
Click to expand...

Sorry but this sounds like a lot of envy.  Why do you think that these parents who got their houses paid from by their parents arent working hard and trying to build something greater?  Work ethic and value of money is really independent of being rich or poor.

Also inheritance is a foreign concept in my community.  Rather than pass your wealth when you die, parents pass it down when their kids actually need it. 
Click to expand...

I'm basing my comments on these types of people that have their parents take care of them as adults.

homer_simpson's quote "(They don't work, don't need to when they get an allowance from their parents at age 28+)"
Click to expand...

My bad...those arent adults, just really old kids :)
 
Chinese Manufacturing Moguls, Chindian Rice Exporters, South American Drug Lords, and maybe a few celebrities if the markets continue on the path they're going. Forget about the double dip in housing, how many businesses are going to disappear along with the jobs they bring to the economy?
 
Debt to Income standards.... aren't. It's all case by case. Debt to Income Ceilings - a more appropriate way to think of them range into the 50% levels. We've seen 28% / 36% DTI borrowers get turned down because they have new income, poor credit, no credit, and a host of other issues that make them an overall risk, not just a payment only risk.

My .02c

Soylent Green Is People.
 
Soylent Green Is People said:
Debt to Income Ceilings - a more appropriate way to think of them range into the 50% levels.
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sgip... not sure how long you've been in the business but 50%+ dti sounds nuts to me... "some" people here say prices need to come back down to mid 90 pricing... but did people really get qualified with 50% dti back then?  i think the lofty dti ratio is what is keeping prices afloat, even more than large down payments, or low interest rates.
 
25 years.

I don't know how long you've been reading my posts, but you and I are in absolute agreement. There are the rare cases where a 50% Debt To Income ratio "makes sense" - high net worth buyers, people who already demonstrate a paying a greater share of their income towards housing, or when there are current family members living with the borrower but cannot be used for qualifying purposes.

Those 3 exceptions represent about 3% of all high ratio transactions. The remaining 97% are buyers who either MUST keep up with the Jones or simply are so gung ho to purchase, what little common sense they had has fled their soul. Since I have a low patience level with that buyer profile, I'm pretty happy to report they did not close their loan with me after reviewing what should be obvious: they cannot buy at the price they are chasing after without realizing they'll have to exist on Cup-O-Noodle and Kal Kan Casserole every night for dinner. If that's the future that they want to inflict on themselves, via con dios my friend.

My .02c

Soylent Green Is People.
 
Soylent Green Is People said:
25 years.  [working in the industry]
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i read all your posts... i have learned so much from them... thank you.

so 50% is extreme, what would you say is the typical dti that get approved today?

has that number been "elevated since the mid 90's"? 

if it has (and you don't expect it to go down) then people must adjust to this "new baseline"...

 
Most Underwriters really want to approve loans with sub 45% total debt to income ratios. In September FNMA is rolling out Desktop Underwriter 8.3 which still allows for 50% DTI exceptions, but FNMA wants to see a note from the Vatican confirming your Papal status first. If you don't have that kind of dispensation, you're going to see your DTI reduced to 45% and no higher.

Most UW in the 1990's had exceptions to 45%, but many loans then were manually underwritten. Many companies were willing to take greater risk because they had their hands in the file, learning what risk the borrower represented. Today, if DU says "Accept/Ineligible" you will find it very tough sledding to get an exception. Robots now make most of the lending decisions today. Unfortunately robots can be easily fooled which is why there are some shops out there actively promoting 50% DTI lending. Hopefully those days will come to a close. I've said it often how once we allowed robot programs to determine credit risk we surrendered a great deal of common sense. Unfortunately the robot now in charge is Bender.

My .02c
 
It's over, what did I say? Down 4% across all major indexes. Double dip? Think Cannibal Anarchy. People using their crown molding for fire and warmth. Clan warfare between neighborhoods. It's only just begun.

But besides that, it's never been a better time to buy!
 
That Pergo doesn't burn worth a damn. Good thing I had Granite Countertops installed. I can bust them up and throw rocks at people if ever I run out of ammo.

If - and that's a very big IF - the employment report tomorrow is even a teesy weensy bit better than expected, the 500 point loss today will be a 500 point bounce. I don't believe that will be the case, but the bigger picture is that one day does not an Apocalypse make.

My .02c

Soylent Green Is People.
 
Well, with another double dip recession, the housing prices will go down further. I think I will wait until I buy...
 
Drop in stock market = drop in bond yields = lower mortgages again.

SGIP - I'm doubt we will see a 500 point rebound even if UE numbers show a drastic improvement. The market VERY VERY rarely recovers steep losses the next day. The cattle got slaughtered today (my 401k included) and the common person will be transferring to Bonds/Mattresses so there will not be enough Buying to recover.

IndieDev - have you started looking into Algae Biodiesel companies? Once we hit Thunderdome status, having an algae reactor will be key.
 
Agreed. If there was a UE number in the 8's we might see a pretty big pop. My guess is a dead cat bounce tomorrow if the number is good of perhaps no more than 200 points. It's highly likely with an inevitable sell off once the Sun crosses the International Date Line that our friends across the Pacific will also rush to the exits.  Friday have a pretty interesting market event with my chips on the table thinking it will be a very red day.

Thunderdome... I seem to have read something recently about that.. hmmm.  ;)

Soylent Green Is People.
 
Algae based fuel? That sounds like a good idea, at the very least you'll be warm, even if you are starving. Pick your friends well in these dark days, because if the going gets tough, you may need to eat them.

The humorous part in this situation is that, even until the end, there will be some housing diehard sitting in his squalor, hoping to one day take out a second on his burned out husk.

"The market will rebound. Real estate only goes up! Irvine is different," he will repeat over and over in his dysentery induced delirium. Even the cannibals won't want to eat him.
 
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