The Votes Are In: No 20% down payment mandate
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Congress should not pass legislation to mandate a 20% down payment for homebuyers to qualify for a residential mortgage, according to 72% of first tuesday readers (129 voters). Only 28% of readers (49 voters) feel a mandatory 20% down payment — proposed by the Federal Deposit Insurance Corporation (FDIC), the Treasury’s Office of the Comptroller of Currency (OCC), the Department of Housing and Urban Development (HUD), the Federal Reserve (Fed), the Securities Exchange Commission (SEC) and the Federal Housing Finance Agency (FHFA) — is wise.
Most of today’s real estate professionals have never known a market where homebuyers had reason to save enough to put 20% down on their home purchase. In today’s economy, such legislation keeps a great many from buying a home until they have started a new regime of accumulating savings, a seemingly treasonous contradiction to the American Dream as groomed since 1982.
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About The Author
ft Editorial Staff
is the writing staff comprised of legal editor Fred Crane, In-House Broker Consultant Fernando Nunez and writer-editors Connor P. Wallmark, Giang Hoang-Burdette, Jeffery Marino, Carrie B. Reyes, Sarah Cantino, Matthew Taylor and Matthew Shade.
I think the next question should be; Will those representing the 72% please come forward and take partial responsibility for causing this housing mess, and the collapse of our financial system. Greed always wins over Ethics when given the opportunity to choose!!
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Okay! D. Mathews understands. It is not difficult to understand that 20% down protects the buyer and adds stability to the housing market. After all, real estate is a long-term investment. There is always mortgage insurance for those who don’t have 20% down, but can afford the MI. Unfortunately short term (greedy) thinkers control the market. If the masses and the lenders simply did what was right and acted ethically, there would be many more folks living in the homes the invested in. How about holding the lenders responsible for the performance of the loans they issue? If that were the case, do you believe there would have been a “stated income” type home loan?
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I have never known a market where it was not wise to put at least 20% down.
It has always been wise to have more equity up front in case of any minor dips in prices.
Especially with all the 3-7 yr ARMS resetting and needing another appraisal 3-7 yrs later.
I put 50% down on my nest egg and it never went underwater since late 2002 purchase.
I slaved and saved for 13 years to do it by being very frugal.
Also left the R.E. market to avoid being a part of the carnage, and can proudly say no client of mine in past 3 years has lost a home or is underwater. Living off savings is not fun/smart though when you are in your fifties.
I have not helped economy much by not spending any commissions earned ..that would put some folks to work surely, but not with others having to lose homes.
I better get back out there and start farming for some listings.
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