Raising the stakes for this bizarre battle was the testimony of former House Financial Services Committee Chairman Barney Frank (D-Mass.), the only Democratic witness called for the hearing. Frank pounced after current panel Chairman Jeb Hensarling (R-Texas) and other Republicans decried the decline in loan availability for low-income and minority borrowers.
"I was very struck by the frankly schizophrenic approach that the majority seems to be making on subprime loans -- loans to poor people," Frank said. "There's a criticism that under the bill, fewer loans are being made to low-income people -- yeah! That was part of what I thought everybody wanted to do. I thought there was a consensus that too many loans were being made to those people."
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The real problem is that they no longer want to loan with people who have student loans. Which means folks like my daughter and son in law, who are a college grads. making well above the median family income and have continued to repay their loans on time, can't take advantage of the current buyers' market. Buying a home over the last few years with the low prices and low interest rate would have been a HUGE leap toward the American dream. They are both minorities who have done everything they were supposed to do to get ahead. Now the banks simply move the goal posts and continue to keep the average man from making a come up. So who is buying these cheap homes? Rich investors and the Chinese. Go figure.
ReplyDeleteIt's their debt to income ratio that's coming into play. They may want to try looking at a house that qualifies for a USDA rural development loan. One where they would pay only a county property tax and no HOA's. Salisbury is ineligible but Delmar, Fruitland, Hebron, Mardela, Pittsville and Willards all have properties that qualify. It doesn't have to be what one would consider a farm either. A home on a lot in a rural area can qualify.
ReplyDelete5:58 how much student are we talking? Did they choose more expensive private or out of state schools? Get advanced degrees? Borrow more than they needed?
ReplyDeleteI had friends that left school with $60k in student loans when they only need to incur $40k indebt. They made poor choices..
I dont think you make a blnaket statement. I was lucky my parents paid my tuition as long as I stayed in state. I decided to go in state. Doing the same deal for my daughter now.
Your daughter/SIL can get ahead, they just need to make adjustments and prepay the debt as fast as possible. Buy a home the can afford and then house up when ready. It may take time but very possible.