I think I saw JPM tightening up too. What message do you think this sends?

claym711 said:

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Chase just announced new mortgages will be required to have 20% down and 700 FICO score

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If others follow suit that will put a major dampener on new home purchases. What percent of home buyers have the ability to put down 20%?

Ragoo said:

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gig em 02 said:

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I think I saw JPM tightening up too. What message do you think this sends?

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JPM is Chase

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Oh yea, well did you see that oil was down 9% today?

gig em 02 said:

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Ragoo said:

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gig em 02 said:

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I think I saw JPM tightening up too. What message do you think this sends?

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JPM is Chase

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Oh yea, well did you see that oil was down 9% today?

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Mortgage companies were starting to slowly inch back toward the models that gave us 08-09. People may not like it for their own personal reasons, but this is ultimately a good thing for the market IMO. I understand that people want to be able to afford to buy a house with smaller down payments, but forcing the 20% puts them in a better position over the life of the loan

Then they're over-leveraged and they didn't make sound financial decisions. 20% down is a good thing for a strong, sustainable housing market

Completely agree, there are going to be thousands of investors that bought into the no money down hype that are going to be foreclosing soon.

I'm wondering if it's a move to put pressure on the government to give the banks even more bailout money. It's good economics, but also seems to indicate a lot of missed mortgage payments and the banks wanting more security.

I'm sure 20% down has benefits long term, but jumping from 3% to 20% overnight would be awful for homeowners today. Especially those looking to sell now.

gvine07 said:

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I'm sure 20% down has benefits long term, but jumping from 3% to 20% overnight would be awful for homeowners today. Especially those looking to sell now.

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It will basically immediately flips the market from a sellers to a buyers if more banks follow suit.

Well I personally don't like it. Buying my first home with 100% financing in 2007 was the best financial decision I ever made and has had the single largest impact on my net wealth. I'd probably still be a renter today had that not been possible. Maybe if I hadn't been a broke dumbass grad student, I could have seen the potential to build real ate portfolio that way.

More serious question, if that is a a trend toward the future, what does that do to new construction and associated companies? I've read for years that a big problem in residential is that no one builds starter homes anymore and it prices younger people and lower income out of real estate, but I thought the lack of new construction there was more due to extremely low profit margin on the build. Do you think affordability of 20% would result in bigger demand for smaller and lower cost new homes? Or is this simply deflationary pressure on home values with no change in new construction?

Exsurge Domine said:

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claym711 said:

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Chase just announced new mortgages will be required to have 20% down and 700 FICO score

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If others follow suit that will put a major dampener on new home purchases. What percent of home buyers have the ability to put down 20%?

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An extreme minority. Imagine buying on the west or east coast.

I didn't expect something like this to roll out. Perhaps it's downstream from Fed, trying to limit inflation.

Big opportunities for companies that have access to the SB loan facility from the Fed. Why not take the loan at 2% and buy up real estate?

IrishTxAggie said:

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Then they're over-leveraged and they didn't make sound financial decisions. 20% down is a good thing for a strong, sustainable housing market

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While sounding good, that's actually very inaccurate. That will drop appreciation rates to well below maintenance plus interest expenses. As in, there will be no wealth generated in the housing market.

By moving to 20% down payment required, you drop the minimum supply requirement precipitously.

They did it during the financial crisis. Why not now?

The appraisal districts in many areas have run property value up too damn fast. It needed a correction. You could literally sell a house in many areas of Texas for almost double what you may have paid for it 5-7yrs ago.

Looking to buy in Denver later this year so maybe this will drop median prices.

IrishTxAggie said:

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Ragoo said:

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Basically only conventional loans will be approved.

Bold move.

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As someone that's in the market right now with the 20% and over 700 score, I like this move. Hope more big banks follow suit. Takes buyers out of the market. Inventories build, sellers become more competitive/aggressive, drop prices, better deals to be had, etc..

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Man that's a great spot to be in. So many 5-10-15% down buyers are suddenly out of the market, or drastically reduced in price what they can buy. Congrats.

A lot of people are about to find out they can't and the CADs have screwed them.

khaos288 said:

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IrishTxAggie said:

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Ragoo said:

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Basically only conventional loans will be approved.

Bold move.

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As someone that's in the market right now with the 20% and over 700 score, I like this move. Hope more big banks follow suit. Takes buyers out of the market. Inventories build, sellers become more competitive/aggressive, drop prices, better deals to be had, etc..

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Man that's a great spot to be in. So many 5-10-15% down buyers are suddenly out of the market, or drastically reduced in price what they can buy. Congrats.

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They're just going with a different bank right now. Fannie and Freddie will be there, but this could prevent some buyers from getting competitive rates

gvine07 said:

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khaos288 said:

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IrishTxAggie said:

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Ragoo said:

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Basically only conventional loans will be approved.

Bold move.

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As someone that's in the market right now with the 20% and over 700 score, I like this move. Hope more big banks follow suit. Takes buyers out of the market. Inventories build, sellers become more competitive/aggressive, drop prices, better deals to be had, etc..

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Man that's a great spot to be in. So many 5-10-15% down buyers are suddenly out of the market, or drastically reduced in price what they can buy. Congrats.

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They're just going with a different bank right now. Fannie and Freddie will be there, but this could prevent some buyers from getting competitive rates

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Oh I know, but the more banks that follow suit will make the competition stiffer and stiffer.

Speaking of JPM, earnings come out Tuesday. What are we thinking?

IrishTxAggie said:

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Some places, yes. Other places, no. CADs have the ability and are incentivized to artificially inflate the market. How many people on those appraisal district threads on the RE board say stuff like "if they'll pay me that for my house, I'll leave right now"?

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Way more of them say it than would actually do it. I'm sure it varies from place to place, but our CAD board is not incentivized to artificially inflate the market. The incentive is to be within an acceptable percent of what the state says values should be. I'm done with the derail on this thread, as I really enjoy its main focus. Happy to discuss elsewhere.

Looking for advice on algorithms. Does anyone have recommendations on a software or website to write their own algorithms? Preferably one that doesn't require coding background.

Exsurge Domine said:

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Speaking of JPM, earnings come out Tuesday. What are we thinking?

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Wells Fargo too. Think I'm gonna load up on the next dip. Dividend looks good and think within a year to year and a half it'll double

claym711 said:

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Rental prices will not go up during a recession, especially this one.

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Yeah I don't think you'll see rent go up with the risk of it not getting paid at all.