samslaught

I'm not an authority, but California, being a community property state, goes by the rule that all assets and liabilities obtained during the term of the marriage are the joint responsibility of both spouses, whether or not they are both contractually obligated to the debt (ie, a co-borrowers). Based on this, I can see where the lender may not be willing to write the loan without OK'ing the credit of the spouse who isn't a joint applicant to the loan. That is the issue it is a community property state Brian is it true that the debt can be settled through escrow? FYI this is an FHA loan

California

I'm trying to buy a house. My wife has a car repo on her credit that happened before we got married. She still owes $11,000. I am buying the house by myself along with my parents. I have good credit, good income and so do my parents. Even though my spouse is not on the loan my mortgage broker said that they have to run her credit. So he did, and when he saw the repo he said that he can't do the loan until the repo debt is satisfied. She's not even on the loan.... I'm confused by this. Our mortgage broker says there are no other options but I just don't believe it. We don't have the cash for the down payment and another $11,000 to pay off the repo debt. So my question is for the pros out there. Are there no other loan options in the world? I'm ready to switch to a new broker if there is!!!

Great I think the case is closed. Hope the world takes notice and implements my plan. It's the least I can do to help save the world. Next week I'll fix health care

glad you asked. My equation would take into account the MEDIAN income of a neighborhood. Hope that helps. I think the banks will certainly resist changing their lending practices....not to get political but I think they profit much more going from boom to bust, record bonuses to bailouts, rather than plain old boring stability. That's just my opionion. The government could try to push for something like this but the banking industry is so much smarter than the politicians that they don't have a chance As for the website that's actually my friends website. I am a real estate investor but I like his program and thought I'd advertise for him

While I agree lending practices were flawed - and may still be- and this did lead to an inflated rise in values - you cannot value a home based on an income for an area. You mention the Janitor but what about the Doctor or attorney? If you use the median income you limit these folks and may in fact still leave the janiotor in a position to buy more than they can afford? If the median income for an area is $75k per household and the Dr. makes $150k but the Janitor makes $35k how do we calculate the value based on that? Other than track homes there are differences - which creates different levels of value as well I must be confusing you. The janitor couldn't buy more home and the Doctor wouldn't qualify for less. I'm not suggesting a change in the credit qualifying system. I'm simply talking about the way we appraise homes for lending purposes. Isn't a Lease a rental? Assuming you are comparing it to say Budget Rental cars - why do you use a rental car? Because your away from home or your car breaks down - You need a quick fix so yes it is more expensive - I would equate this to staying at a hotel Not Renting a home - A hotel is a convenience and costs more than if you owned Your missing my point. My point is if budget rental cars were cheaper than owning people should and would rent instead of buying. For that reason car prices shouldn't rise to an average of say $75,000 per car because at that point renting would make more sense because the cars would be over valued. However we see this happen with homes I would argue that this is not flawed - you are paying for the increased odds of damage - you rent a car based on the number of days a month it sits unrented etc.... not going to change - If they could rent a car knowing it would be rented every day and that they would not be driven harder than normal prices would drop - again has NOTHING to do with appraisals but it is conversation examples are meant to make you think about things from a different perspective and aren't going to directly correlate with the subject at hand Most banks do NOT lend on land alone. They want to see how it will be used and base the overall value on the finished product - getting a land loan is almost impossible these days I'm not talking about land lending, i'm talking about placing a large value on land, FOR APPRAISAL PURPOSES, above and beyond the replacement value of the home. When homes were at their peak they didn't cost anymore to build, there was simply 100's of thousands of dollars being placed on the value of land. Anyway in the end it doesn't matter to me how banks choose to appraise properties and in turn lend on them it's just sad that they are so foolish. I know that if I was lending my money I would not care about comps at all. What I would care about is the factors I laid out above. Right now there are homes and properties that I would be happy to loan 100% LTV at the moment because the home is under valued. I say it is under valued because it would cost more to build a new one, it would cost more to rent a similar house, and it is affordable enough for 90% of the people in the neighborhood. When homes were higher I wouldn't have loaned more that 50% LTV because of the same reasons. So while banks using the current method are conservative now while homes are under valued and liberal back when homes were inflated, I would be the opposite. Not because I have a crystal ball predicting booms and busts but because I am practical about the value of an asset. I would not need a bailout with my method but if banks don't change their methods they will soon need another.

now that you have one high limit card you won't have much trouble getting a few more with that limit. In fact you could probably call customer service on your other cards and get an increase.

Well Doug you certainly shot some good holes and trust me I'm a free market guy. When I put this together though I was considering how banks should lend on property per appraisals and not what the market value is. I mean technically if you want to be a pure free market guy a property would be worth what someone is willing to pay for it right? The act of an appraisal is so much more an art than a science. I mean really I find the idea of using comps kind of funny. Imagine in school if your grade was heavily weighted on what the last three kids in your row scored last month. It means nothing. I would argue that the value of a home has a lot more to do with the income of an area. Homes prices adjust to income eventually but because we don't value them this way we have boom and bust bubbles as we sell $500,000 houses to janitors one year and deny $150,000 houses to the same people 5 years later. I would also argue that a homes value should and does go hand in hand with rental rates as well. This works for homes as well as any other product. We just fool ourselves once again with our strange way of valuing homes. People buy and lease cars because it's cheaper than renting one. If rental companies could make a profit by renting their cars cheaper people wouldn't buy them as often......although that might be another financially flawed habit that is hard to break. Finally I would give little value to land not because it doesn't have value but again because it is so subjective and can fluctuate so much I wouldn't lend on it. My intention with all of these ideas is to stabalize values by looking at real worth not fantasy market numbers. The market can still go up and down as it wants but it shouldn't do so with federally insured credit it should do so with cash and private money

So I have been thinking for a while that we should have a complete change in the way we value real estate for lending purposes. This wouldn't be a TRUE MARKET VALUE just a guage on what banks should lend on. If for instance the free market wanted a home to be worth more people would simply need to bring more cash to the table. Here's my suggestion and I am curious as to what people think. Current method: comps, neighborhood market trends, amenities, condition My 3 factor method: median income in neighborhood: An equation that took in to account current interest rates, an average families median income, and unemployment could determine the affordability of a home and hence it's value. rental rates: If a home mortgage payment is cheaper than renting the home is under valued and vice versa. Home mortgage payments should be about 10%-20% higher than renting rebuild cost: If you had to rebuild the home what would it cost. I would subtract a certain percentage on a sliding scale based on how old the home is. I would give a very low value to land.

Think of Bernie Madolf on a government level. The scam has run for so long that we have a lot of assets and technology which are priceless and a debt that can be erased with a phone call (or missle). Unlike Bernie there's nobody to throw the US in jail though for the whole scheme. We simply need to keep things going long enough until we don't need oil anymore. At that point the next global shortage will be food, and we are capable of growing plenty of that. Personal debt isn't that big of a deal either. Most Americans can get out of debt by letting their homes, cars, and credit cards go. Oh the humanity! The consequences of this financial nightmare is renting a house, paying cash for a used car, and not buying $200 shoes on credit. You will still have a better life than 97% of the people on this planet.

it seems to me that as a country we have lots of places that we could easily cut spending but have chosen not to at this point. Most people like to think that the politicians lack the political will or the corruption is to deep to root out. I personally think that our government isn't really concerned about debt....and possibly with good reason. We have set ourselves up as too big to fail. Our debts can't take us down without hurting everyone else more. If it comes to it you will see debts wiped out but American tanks will still have fuel

the title company that was handling the purchase

Thanks Doug. That's what I said but that statement of identity form is strange. It says he has to give all of his personal information and the form says it is to check for liens, judgements, ect. Just don't know why anyone cares if he is buying and not selling. I'll let the board know what happens

the buyer is the one with the judgements. Sounds odd that someone with judgements is paying cash for a house but that is what is happening

Can liens or judgements become an issue when purchasing a home with cash. My friend just ask me this and I always turn to this board for answers. I thought that it wouldn't matter without a lender involved but he was woried about title insurance because they sent him a "statement of identity"