Please mind that I am talking for quite some time about NINJA loans and nothing else. I am sure that you know way more about those loans than I could read on the net and that your answer could end all discussions quite quickly.
Like Jamis sais, NINJA loads were a tiny fraction of loans overall. The majority of loans were, and still are, one of three types - conventional, FHA insured, or VA guaranteed.
The topic was about people walking away from a mortgage and I assume that people wouldn't walk away from a mortgage if they had made a down payment or had any assets or justifiable income the bank could take away from them if they walked out on their obligations.
You assume wrong. People are not all just, reasonable, and rationed. In fact, when it comes to money a lot of people are just plain stupid. People do the darndest things for the dumbest reasons. Ive seen people walk away from thousands of dollars in equity over a $50 light fixture.
As for the down payment or assets, to some people any amount of down payment or equity is irrelevant. All they care about is that is has become inconvenient to make that monthly payment.
- If you grant Ninja loans more houses will be bought. The more you sell houses the cheaper they get. This is how banks influence the MARKET. They don't drive the market, otherwise they wouldn't need the 700 billion bail out, but they influence it and not in a good way.
Huh? The more houses sell, the
stronger the market. The stronger the market, the greater the market value growth. Basic economics.
Again, you keep coming back to your Stick it to Big Bank mentality. Its laughably incorrect. And its getting old. You have a beef with lenders. We get that. Problem is, emotion doesnt win a financial debate. Facts do. All emotion and no substance is fine for liberals and media hounds, but the rest of us live in this place called Reality.
The loan approval must be conditional on a particular house because what else would they be looking at ? Your promising future since you don't have a job, income or assets already ? In my opinion they used Ninjas as strawmen to buy places they "thought" would gain in value and come back to them when the Ninja disappeared into thin air.
Incorrect. The loan approval has nothing to do with a particular home. Again, you can get loan approval before ever even searching for a home. You must think I am lying to you because you keep coming back to this, and obsessively so. Its a little scary, really, and bordering on tin-foil hattery. You are trying to make a connection that isnt there in order to accommodate or validate your idea of some great bank conspiracy. All I can do is keep telling you it isnt so, but if you aren't going to believe someone who lives the business everyday then I suppose you aren't going to believe anyone.
Also, you are still hung up on the NINJA loan like it's an overpowering market force. IT IS NOT. It was such a small portion of the market that I never even saw one. Heck, I never even
heard of one until it was mentioned on the news many months after the mortgage mess was in full swing. They were an inconsequential part of the mortgage market. Period.
- So how much should an individual be able to borrow ? 5 times the yearly amount of what he doesn't earn ? 9 times the down payment he is unable to make, twice the assets he doesn't have ? Or maybe just the amount he needs to buy the big house ?
Again, you're obsessing over the NINJA loans like that is the kind of loan everyone has. That is incorrect, and grossly so. Most loan products still conform to a maximum of appx 50% of your gross annual income in combined debt obligations, including things like car, loan, and mortgage payments.
Laurent, I admire your zeal and tenacity, but your information is flawed and your suppositions seriously skewed by what appears to be a vendetta against banks in general. I applaud your effort, but your application leaves much to be desired.
Brad