Recently I wrote a bit on homes on Land-lease land to warn anyone who is looking to buy and is wondering about this kind of place. In our pursuit of owning instead of renting, and being lower-income, I have learned some more about real estate and mortgages, and I must say, the real estate world doesn’t make much sense right now. And, the only group of people who are benefiting – in the low-end market, anyway – are the investors.
So we had this whole mortgage debacle and the recession (depression), and rules were changed as a result. When new rules and regulations are made, it’s because someone out there was greedy or mean or evil, and “safeguards” are put into place. These “safeguards” normally end up being a real pain in the posterior and make good people work harder, work more, pay more, etc.
Our personal background is important here, since getting a mortgage is tied to one’s last two years of work. I couldn’t get a job during the recession/depression because no one would hire someone who hadn’t worked in a while (I stayed home for quite a few years to help my son with his learning issues); in fact, many employers wouldn’t hire someone who wasn’t working already! In addition, I was either over qualified or under qualified, depending on where I was applying. But I was finally able to land a job – a very part-time one. I have had this job for about 15 months now and my boss is happy with me.
But, for Fannie Mae to consider my income at all, I have to have worked for my boss for at least 24 months. Wow . . . that really helps people who are trying to get back on their feet . . . So, we’re lower income and trying our darnedest to buy a home, since our monthly costs will be LESS, but we can’t because Fannie Mae says we’re just not responsible enough . . . ! Isn’t pleasing a boss and sticking with it for 15 months responsible, as well as trying to live more within our means??
Coupled with the amount that we can borrow relative to our income that actually is “acceptable,” well, it’s just crazy. See, they will give us a loan that shows that we can pay 50% or more of our monthly income on our housing costs. As a lower income person, how can I do that??? If I pay for health insurance, car insurance, and my other needs, I couldn’t afford to pay out 50% for housing costs. So it’s as if they want people to fail.
So, my good part-time income can’t be included when trying to get an ARM loan, BUT, they are willing to loan us a bunch of money under a higher-interest conventional loan under the condition that we pay about 50% of our pay toward housing costs.
As an example, the mortgage on a conventional loan of $200K for us would be almost the same as an ARM mortgage of $250K. See what a difference a little interest makes? We have the same credit rating, but getting different rates; I have excellent credit, but they won’t use it.
Meanwhile, my agent tells me, investors are having a feast here in Southern California. They gobble up, with cash, all the lower end places and then rent them out; these new land owners are from places like China, too. For people like us who can only afford a lower end place, either we simply can’t compete, or we have to end up moving into a complex that isn’t kept up, is over-crowded, won’t resell well, etc. I don’t get how we can continue to allow foreign investors to buy our homes, places our own citizens ought to be able to buy and live in.
The rich are favored in this country in the name of freedom. You are free to make a better life for yourself here if you’re wealthy or if you cheat (if you haven’t heard of the level of cheating that goes on in universities and on resumes, then you should check it out). A “free” country can’t work when people are only into it for themselves, otherwise those who are power hungry and greedy will naturally percolate up and come to control whatever they want. While our country’s history has not been perfect by any means, it was founded on Christian ideals. Freedom can only work in this type of “love your neighbor as yourself” context.
So in everything, do to others what you would have them do to you, for this sums up the Law and the Prophets. Matthew 7:12
In Christianity, you are supposed to give to the poor, not take from them or oppress them. God commands in the Old Testament to not collect usurious interest.
In you men accept bribes to shed blood; you take usury and excessive interest and make unjust gain from your neighbors by extortion. And you have forgotten me, declares the Sovereign LORD. Ezekiel 22:12
And, we are to love our neighbors as ourselves, just as Matthew 7:12 already pointed out. And who are our neighbors? Everyone, really, as the story told by Jesus of the good Samaritan alluded. Certainly, we are not to be naive concerning cheaters and frauds, but our country favors the wealthy and aggressive and keeps down those who don’t want to climb the ladder to riches. How else do you think we keep having these financial debacles that make everyone suffer and damage the whole economy?