Xstine and I finally went to watch the new Batman movie The Dark Knight, and Christopher Nolan's direction (and writing) continues to amaze me. It's not often that I experience a drama so intense that my chest is left seized in bathyspheric shock, even with a mostly trivial cast.
With one huge exception… Heath Ledger's dying silver screen gift of the most insane Joker yet. His character earns the spot for my third all-time favorite movie villain, the first being Bill the Butcher, and the second being Oldman's corrupt nothing-like-Gordon cop Stansfield. Ledger was chaos incarnate, and reached a place in himself he couldn't return from.
I absolutely loved the rhetorical sarcasm of his finest line "why – so – SERIOUS?" that he delivered with a maniacal slurp of his mutilated jowls. Today, catching up on old news, I found myself repeating and cackling that line over and over as I read this article on the Senate's "landmark" housing bill.
Here's an amateur's opinion, for what it's worth:
- Establish a stronger regulator for the GSEs.
And who will that be? Government? Private? Where's the fundamental change?
- Permanently increase "conforming loan" limits.
This is good news for me an Xstine, but honestly, I've never understood conforming loans. If the point of the conforming loan is to keep borrowing at a less risky level (less than jumbo), and the amount is determined by median house price across the country, why apply the same loan limit to everyone? Why isn't it by the local median price around the house that the borrower wants to buy?
You get a conforming loan limit that was too small for us middle-income folks in overpriced California Bay Area, and way too much for low-income people in downtrodden areas. Is it any surprise that those low-income people who couldn't qualify for conforming-loans then went over to non-conforming sub-primes?
Even worse, those just just failed to get conforming loans went over in droves to Alt-A loans. I'll let Mr. Mortgage explain what those are and why you should continue to fear the housing market.
- The FHA maximum loan limits for high-cost areas would also increase to $625,500.
Ok a blanket increase in limits for whatever "high-cost areas" means. I've got to ask how this is paid for, and if this isn't just a way to keep the masses of potential educated middle-class from just defaulting? It's like increasing the credit limit of someone who already can't pay the card off.
- Create home-buyer credit.
Up to $7,500 tax rebate for first time home-buyers? Good start, who's going to pay for this? Oh wait a minutes…
- The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments.
…ah we pay for it. Very very sneaky. I see what you did there.
- Bar down-payment assistance for FHA loans.
No comment, don't know the full ramifacations of this. I don't see the upside of stopping sellers from helping buyers, is this to stop speculation?
- The bill would also increase to 3.5% from 3% the down payment requirement for borrowers getting FHA loans.
Not great, but not that bad either. Not a monumental change.
- Create an affordable housing trust fund.
Hahaha… they want Freddie and Fannie's fees to pay for this? Freddie and Fannie who were using $83 billion in cash to juggle $1.15 trillion in debt at 60-to-1 leverage? It's like asking a broke junkie to put something into his IRAs before someone with a tire iron comes to get his due.
- Give grants to states to buy foreclosed properties. The bill would grant $4 billion to states to buy up and rehabilitate foreclosed properties.
More money we don't have going to ever more fiscally endangered states to buy properties that you really don't want to encourage people to sell.
So, I'll ask again… WHY – SO – SERIOUS?! :jester: