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Hows this going to help the economy?

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/19/AR2010011904281.html?wprss=rss_business

The Federal Housing Administration has announced plans to increase the amount of up-front cash paid by new borrowers and to require higher down payments from those with the poorest credit. The Federal Housing Administration currently backs about 30 percent of all new home loans and about 20 percent of all new home refinancing loans.
Tighter standards are going to mean that less people will qualify for loans. Less qualifiers means that there will be less buyers for homes. Less buyers means that home prices are going to drop even more.

Answer Question
 
Anonymous

Asked by Anonymous at 2:37 PM on Feb. 7, 2010 in Politics & Current Events

Answers (7)
  • Soooooooooooo, we should once again JUST allow people who have NO hope whatsoever of paying for a house get one using taxpayer backing, ala Barney Frank?

    No, thru all the crap the country is going thru, we have to have learned something!
    mustbeGRACE

    Answer by mustbeGRACE at 2:52 PM on Feb. 7, 2010

  • People who can't afford a house need to rent. Sad but true. The reason the housing market is crashing because people who couldn't afford homes were given loans. Now they can't pay for them.
    Jenna66

    Answer by Jenna66 at 3:45 PM on Feb. 7, 2010

  • It will help the economy by keeping thousands of homes going under foreclosure and leave them sitting empty. I hope it stops new home construction. I don't see why they keep building new developments when there empty houses all over the place just waiting for someone to buy them. Flooding the market is what tanked the economy in the first place.

    maxswolfsuit

    Answer by maxswolfsuit at 4:05 PM on Feb. 7, 2010

  • *sigh* We wouldn't be in this mess if the government hadn't interfered in the first place and encouraged banks to lend to iffy creditors. I bought my first home in the late 80's and had to leap through hoops to get a loan, even with a large down payment and perfect credit. By 2000, everything had changed.
    mancosmomma

    Answer by mancosmomma at 4:41 PM on Feb. 7, 2010

  • It will in the long run. Thats one of the major things that got us into this depression. Also, you know the credit bill they "fixed" so people wouldn't be screwed by banks and credit card companies? Well, thise buy now pay later offers you see at furniture stores etc will no longer be allowed after Feb 22. We bought our bed on one of those offers and will pay it all back interest free next week. It's a convienace that is good for many but there are a lot of people who just buy it and then don't pay. So it too will be good in the long run. Banks just can't absorb those losses anymore.
    itsmesteph11

    Answer by itsmesteph11 at 9:01 PM on Feb. 7, 2010

  • What good are new loans if people can't afford them. Why can't people work harder and SAVE some money to put as a down payment? That is what people used to do. Why on earth would you give a mortage to someone with a poor credit history?
    yourspecialkid

    Answer by yourspecialkid at 11:23 PM on Feb. 7, 2010

  • Agreed yourspecial it works out better for the buyer anyway they arent buying something they likely cannot afford living an ilusion because in a few months or yrs time it will be taken from them..and then they moan and blame someone else for it like they expected it to just be given to them for free.
    tnmomofive

    Answer by tnmomofive at 9:45 AM on Feb. 8, 2010

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