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Delinquency fears warranted?

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Mortgage Professional America | 01 Dec 2015, 06:30 AM Agree 0
One advocacy group is calling for more scrutiny around who is obtaining mortgages, but are those concerns exaggerated?
  • Jerry Quigley | | 01 Dec 2015, 10:09 AM Agree 0
    The delinquency rates/percentages are eye popping!
    In Canada government insured mortgages on average show 24bps total delinquency - miniscule in comparison.
  • Richard S | | 01 Dec 2015, 10:46 AM Agree 0
    Post 2008, we live in a different world. In the past, borrowers would avoid foreclosure at all costs and it was a measure of last resort. Now, a moral compass has changed. Everyone knows someone who had a foreclosure. These people did not burst into flames and there is no longer a stigma to having ones name posted in the public records. It is well known that a new mortgage can be obtained in just a few years following a foreclosure. As a matter of fact, public opinion has changed in that a person is now a victim of foreclosure and not someone who failed to make payments as agreed. Borrowers will now walk away from a house rather than a car, which is a new phenomenon. As long as their is divorce, depression, alcoholism, drug addiction, death, illness, incarceration, job loss....there will always be some level of foreclosures. However, the new variable is the integrity of the buyer. Gone are the days where a mortgage was the highest priority, something to avoid at all costs. Foreclosure default has become socially acceptable and due to the lack of long term consequences, is more desirable than bankruptcy. Until there is a tax penalty, deficiency judgement or other long term consequences, there is little deterrent to foreclosure and this new attitude will limit credit to those who need it most. No matter what has happened in the past, a borrower must take personal responsibility and not borrower more than they can afford, even if they are allowed to. There used to be a common term, Starter Home. It was a basic home that put a roof over your head while a buyer would build credit, increase their income and build equity. A homeowner would then sell the starter home and move up, leveraging the equity from the starter home after having this new discipline and experience of managing a home. It is important for everyone to live within their means and borrow less than they can afford at any moment. Life has its up and downs and we must always be prepared with at least 6 months cash reserves. This is not possible when we are over extended.
  • Scott | | 01 Dec 2015, 05:26 PM Agree 0
    I would very much like to see where you come up with 23% more likely to default on non bank FHA mortgages.
    Every FHA mortgage is underwriten by a bank, it once again appears in another falsely worded artlicle that Brokers are to blame for the default rate.
    That is another false statement.
  • Raquel Mullins | | 04 Dec 2015, 04:42 AM Agree 0
    Yeah, me too feel that proper scrutiny is required while obtaining a high value VA home mortgage or an FHA mortgage from a government certified lender.
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