Duggan to Detroit Expats, 'We can't get mortgages'

[Hypestyles]

banking policy needs a radical overhaul at the federal level. Too bad it won't happen.

[Dbest]

Why make excuses for banks? Without them leveraging their debt onto taxpayers we might not even be talking about this. The biggest banks, the biggest offenders. It's funny some cast judgement on their neighbors, and align themselves with some spineless bank who is sucking off their tit.

The mortgage industry has been less than scrupulous. Faulty appraisals, under-qualified lending. The lending had little to do with "being nice" to lower income people and more about commissions being made all the way down the line...It was truly pathetic.

In the meantime BANK OWNED houses get scrapped and rot out... People who support this business model are nucking futs...

[313WX]

banking policy needs a radical overhaul at the federal level. Too bad it won't happen.

It did happen.

But our "pro-business" legislators in Congress decided to repeal the policies that kept the banking industry in check...

[Cincinnati_Kid]

I'm not putting the onus on the customer. I'm point out that you're bitching that we had the mortgage meltdown, but then scoffing at tight lending restrictions that would had helped mitigate it.

Nowhere in my post did I assign blame, I pointed out that you're complaining about both the PROBLEM and the SOLUTION to the problem.

Problem: A whole bunch of people got foreclosed on, the housing market collapsed, values plummeted

Solution: Tighten lending guidelines to make sure that people who can't afford houses don't get into the situation in the first place

Your Grievance: People with low income\bad credit can't get mortgages!


"I hate fires! But dang, I sure do hate getting wet from the firefighters putting out the fire at my neighbors' house!"

I beg your pardon, I don't have a grievance with anyone and I'm assigning blame. People with low income/bad credit weren't the only one's to lose their homes. People with good incomes and great credit lost homes. Are you kidding? I was merely pointing out that banks and mortgage companies helped cause this. So I guess we've reached a impasse in this conversation. They wrote the loans they knew were bad, then turned around and tighten the standards after the crisis, that should have been there in the first place. You answered your own question under Solution, which is exactly what I said. Don't write the loan, when you know they can't afford it. Turn them down, show some accountability which most didn't. Not hard to understand, but you stand by YOUR beliefs, and I'll stand by mine.

[Hermod]

I beg your pardon, I don't have a grievance with anyone and I'm assigning blame. People with low income/bad credit weren't the only one's to lose their homes. People with good incomes and great credit lost homes. Are you kidding? I was merely pointing out that banks and mortgage companies helped cause this. So I guess we've reached a impasse in this conversation. They wrote the loans they knew were bad, then turned around and tighten the standards after the crisis, that should have been there in the first place. You answered your own question under Solution, which is exactly what I said. Don't write the loan, when you know they can't afford it. Turn them down, show some accountability which most didn't. Not hard to understand, but you stand by YOUR beliefs, and I'll stand by mine.

The problem was with the mortgage companies and banks making the loans, the real estate guys "greasing the skids" for the loans, the appraisers, the guy signing for the loan, and the government buying the loan. Everybody along the line thought that houses would keep appreciating at a geometric pace. If the loan went sour, the house would still sell for more than the loan balance. The borrower knew he was overextending himself, but if he got in trouble, he could sell the house and pay off the mortgage plus have a bundle of cash in his pocket. The lender knew the buyer was shaky, but figured that by the time it came to a head, the house would be worth more than the loan.

Ever figure why a pawn shop won't go more than 25% of the price even for something brand new?

[ABetterDetroit]

Mmm... A billionaire who sells and services mortgages who wants the "fail jail" site and 1300 Beaubien like yesterday... A city and a county that badly needs a lender who would be willing to lend on properties that don't comp or meet Freddie/Fannie guidelines.... How about 50mill cash another 100 mill in a company set up for single family home mortgages in Detroit that Gilbert can own and retain the investment of but must make available to best qualified candidates at x amount per year... And a contract that lays down the time period for redevelopment of fail/1300 sites in x amount of time... Make a deal, sit down and negotiate! It almost sounds too easy meeting everyones wants and needs on this stuff.

[Wesley Mouch]

I just discovered something rather interesting.

http://datatools.urban.org/Features/....4660/-83.0972

Basically, what needs to happen is either banks loosen up on lending or Detroit's housing value needs to get significantly higher. The latter would disproportionately price minorities out of the metro area [[or create a great need for subsidized housing). The banks do play a role in this and they're not innocent bystanders. They have great leverage to move the economy in the way they want to.

Of course, a third option is to focus on getting more minorities up the wealth ladder so that they aren't simply limited to the least affordable areas.

Except it looks like the impact was 'proportionate'. Black rates rose and fell with white rates. This suggests the banks are in fact color blind.

This 'disproportionate' crap is just crap. If you adjust for income and location, I'll bet there's no difference whatsoever. I don't believe there are racist lenders hanging out declining loans based on race. I suppose that makes me a racism denier.

[Cliffy]

I always tell people that you need to have lots of $$$ saved up or forget buying a house. Houses are expensive especially when you need to call the plumber, electrician, or roofer. People that are trying to buy a house and only have $800 in the bank shouldn't even bother. You aren't ready yet.

[Chicago48]

Just to be fair, in the midst of the housing-loan collapse, Ira Glass did a piece on the banks and mortgage companies, how the bubble burst, and what went wrong. I remember one interviewee sniffling while telling his story about how he lost his $369K house. The guy made $30K a year. Should he have been given the loan? No, of course not. But on the other hand, what was he thinking?

A lot of those home owners ALSO got big equity loans and never paid it back.

[Chicago48]

I always tell people that you need to have lots of $$$ saved up or forget buying a house. Houses are expensive especially when you need to call the plumber, electrician, or roofer. People that are trying to buy a house and only have $800 in the bank shouldn't even bother. You aren't ready yet.

The best way to buy a home is with cash -- pay it all or at least 1/2. That way you don't have a large monthly payment.

[Dan Wesson]

love love love the land bank and all its doing to advance the home ownership process, but this isn't surprising. as a student-debt heavy millennial, we are only homeowners courtesy of HUD and our 3%-down mortgage handout. would love to buy us one of these land bank beauties...

"Since the program started in May, 162 homes have been claimed at auction for more than $2 million. But only 45 of those sales actually have closed, because buyers can’t get mortgages. "

http://www.crainsdetroit.com/article...-blight-crisis

If you go back in time this kind of political clamor led to the 2008 financial debacle.

The finance industry was directed to make home ownership easier for the masses. Well they sure did and then some.

There are some basic truths that in reality can't be avoided, Banksters knew it and protected themselves accordingly. It is the masses and politicians that care not about such trivialities and are still paying for it. They think they aren't paying for it but they are.

Duggan complaining about lack of mortgages? Nothing new here.

[Cincinnati_Kid]

The best way to buy a home is with cash -- pay it all or at least 1/2. That way you don't have a large monthly payment.

Correct in theory, but most people don't have $50,000 to $100,000 dollars lying around in a bank.

[Dumpling]

I am positive that this forum has people that are better acquainted with Jane
Jacobs' work than I am. One of her urban development stories had to do with,
in a certain area in New York City I believe, people could not get loans for home
improvements. Eventually what happened there, some years ago, was that
people put gentle pressure on the local lending institutions. As in, see here,
we have put our hard earned money in your bank. Maybe some of this should
be loaned out to some of us also. After some community action eventually the
banks got on board and started making the much needed home improvement
loans to the community.

[Johnnny5]

I am positive that this forum has people that are better acquainted with Jane
Jacobs' work than I am. One of her urban development stories had to do with,
in a certain area in New York City I believe, people could not get loans for home
improvements. Eventually what happened there, some years ago, was that
people put gentle pressure on the local lending institutions. As in, see here,
we have put our hard earned money in your bank. Maybe some of this should
be loaned out to some of us also. After some community action eventually the
banks got on board and started making the much needed home improvement
loans to the community.

Maybe that would work if they still actually wanted our deposits. The Fed is basically giving big banks as much money as they want at next to nothing interest rates. They don't need our deposits, and they're not likely to go out of their way to keep or earn them.

[Hermod]

Maybe that would work if they still actually wanted our deposits. The Fed is basically giving big banks as much money as they want at next to nothing interest rates. They don't need our deposits, and they're not likely to go out of their way to keep or earn them.

And you don't get a free toaster either.

[Dumpling]

I think matters are a bit more complex than that, but certainly banks are "bigger"
than in Jane Jacobs' day. They have more capital, more streamlined back office
procedures, savvy advertising, etc. etc. and have bought out or squeezed out
many a smaller local bank. It might take more than a few community activists here
or there to get them to change a policy. I know that typically people just close
down an account when they are not happy with their bank rather than starting or
joining an activist association. Big banks can hang on and on and on even when
they are not customer friendly.