Monday, May 19, 2008

Mulling the Homeownership Retention Act of 2008

A dose of linkage for anyone interested in H.R. 5830: FHA Housing Stabilization and Homeownership Retention Act of 2008... HR 5830: Homeownership Retention Act of 2008 HR 5830: Homeownership Retention Act of 2008

I find it mostly insane that in order for my wife and I to have qualified for assistance via this bill, we'd have had to have bought (by my nebulous calculations) a home somewhere in the $400k range. Which, by extension, would mean that we'd be carrying a payment of at least $2,400 per month (principal & interest only).

Would such a payment cause us "financial hardship?"

Uh ... yeah.

From the bill:

CURRENT BORROWER DEBT-TO-INCOME RATIO — As of March 1, 2008, the mortgagor shall have had a ratio of mortgage debt to income, taking into consideration all existing mortgages at such time, greater than 35 percent.

A wee bit vague there (sounds like the "35 percent" means "payment as including principal and interest" to me, though I could be wrong) but still a face-slap. As a means of comparison, given that (1) Oklahoma never contracted Property Fever, and (2) my wife and I have basic budgeting and math skills, our current house payment is a nudge under $700.

That is principal, interest, taxes, and insurance.

On a 15-year fixed-rate note.

Please don't tell me all about how "It's different in [Cali / Ariz / Fla / Nev]" or any of that. I'm totally not interested in the (admittedly vast) differences between a $400k house in Oklahoma City and a $400k house in San Diego.

If yuo cannot afford $400k in Oklahoma, then yuo cannot afford $400k in Cali. 'Tis not my fault you couldn't do math. Or read the fine print. Or question the motivations of your mortgage broker and/or relitter (that's "realtor" for the non-Calculated Risk readers out there).

Or move.

Once more, color me against any and all taxpayer-backed, bubble-inspired mortgage assistance.


— Posted by Michael @ 10:24 AM

** Comments Closed on this Post **

Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


Start (2005-12): ~$21,900
Currently: $0
[About Our Debt Paydown]


Savings Goal: $15,000
Currently: ~$15,115
[About Our Liquid Savings Goal]