Thoughts On A Sunday

It’s been a very busy day for yours truly, said day including a trip out the NH Seacoast to celebrate the birthdays of my grand-nephew and grand-niece. One of the WP Sisters also came up to The Gulch from the People’s Republic of Taxachusetts Saturday evening with her boyfriend, staying overnight and going to the Seacoast as well. It meant a lot of changes and a not unexpected upheaval of my Sunday routine. For one thing I didn’t even start writing this until well past 8pm. I usually start Saturday night or early Sunday morning and peck away at it throughout the day. But that wasn’t happening today.

This also meant that I haven’t been able to finish up in getting the Official Weekend Pundit Linux Desktop computer squared away. There are still a couple of steps I need to complete before I have it restored to full function. They aren’t difficult, but they are time-consuming, and I haven’t had the time to do so.

Oh, and one more thing that threw a wrench into the weekend works: The trusty (but no longer rusty) RAM 1500 is still in the body shop and unlikely to be ready before this coming Tuesday.

As such, this will be a greatly abbreviated TOAS post, something I am loath to do.

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Oh, this next thing is going to work out well…NOT.

Fannie Mae is removing minimum credit score requirements.

I have to ask if this is just another version of the Community Reinvestment Act (CRA) that had banks giving mortgages to people who in no way could afford to make mortgage payments. Interest Only mortgages were popular where the homeowner would only be paying interest on the mortgage for a set period of time. But once they also had to start paying on the loan principle they could no longer afford their payments. Some of the thinking by folks who took such loans was along the lines of “If we get into trouble, we can just sell the house.” The problem was that so many people got into trouble that a lot of homes went on the market at the same time and there were a lot more sellers than buyers. There was also the so-called NINJA (No Income, No Job or Assets) mortgages issued, again because of the ‘incentives’ under the CRA. Is the removal of the minimum credit score requirements going to lead to a repeat of that debacle?

Under the existing system at least one person on the loan had to have a 620+ credit score with no exceptions.

That’s now gone and home-buyers will be evaluated “using a holistic, risk-based assessment.” What? Can anyone tell me what that means? The below is what “they” say will be used:

• Credit history and payment patterns
• Income stability
• Savings and assets
• Property factors
• Overall borrower + loan profile

There’s a lot more in the article that explains the changes by Fannie Mae, but it isn’t giving me a good feeling, particularly in light of the continuing increase in the cost of housing.

Will this end up creating a repeat of what we experienced starting in 2007 and lasting through 2011?

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And this was the (abbreviated) news from Lake Winnipesaukee, where we saw some snow on the ground this morning, the winds have been gusting enough to make it interesting driving on the roads and highways, and more wind is on the way.