The reason I even bring this up is because it appears that the government messes up everything they get involved in. And they always have. This includes my industry, the mortgage and real estate industry, where they apparently cannot figure out a simple solution to a problem that has rocked the nation: how to dispense mortgages to qualified borrowers across the nation. The government's problem: defining "qualified" and through some fuzzy thinking, creating a "red lining" policy within and among states. It didn't have to happen.
In the past, I have talked about three similar cities within one state, California, having three different conforming loan limits under the expanding conforming jumbo program. The three are Beverly Hills, La Jolla and Santa Barbara.
Realistically, why the difference?
I have mentioned the self employed problem, which was exacerbated on December 15, 2008 when the government's companies, Fannie Mae and Freddie Mac, would no longer accept their own findings from their automated underwriting system. Prior to that date, if you had a low loan to value, a high credit score and good liquid assets, you needed only to prove that you were self employed for two years and you would get the loan. No more!
I stated previously that many lenders are forcing appraisers to change the actual comp sales (price of a house when it sold) that took place and put a declining factor on the price to reflect the property is in a declining market. This of course, to the naked eye, will insure that the declining market will continue to decline until houses reach a price of zero.
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.