Mortgage Market Reopens to Risky Borrowers • Hacker News Board

Re: Mortgage Market Reopens to Risky Borrowers

#91

Post by rockinghigh » Wed, Aug 21, 2019, 9:56 PM UTC

dawsmik wrote: post #9

apo wrote: post #2

> Some $2.5 billion worth of subprime loans, those with FICO credit scores below 690, ended up in mortgage bonds in the first quarter of 2019. That is more than double a year earlier and the highest level since the end of 2007, according to Inside Mortgage Finance. There was $1.9 billion worth of subprime mortgage bonds in the second quarter. Statements like this are hard to evaluate without knowing the denominator:…

The FICO score is only one consideration. The biggest problem with the loans in 2007 was lack of verification of income and buyers qualifying on a mortgage amount that would eventually go up. A 650 FICO borrower with a good job, downpayment and an affordable monthly payment is a pretty good risk.

My assumption is that someone with a score less than 700 probably had late payments on some of their debt.

Re: Mortgage Market Reopens to Risky Borrowers

#92

Post by buttcoinslol » Wed, Aug 21, 2019, 9:57 PM UTC

kurtisc wrote: post #55

rayiner wrote: post #6

Earlier quoted context omitted.

The problem is that most journalists are innumerate. As Matt Yglesias notes, "many reporters and editors don't really understand what they're doing. Reputable colleges hand out degrees to people who have almost no understanding of quantitative methods." [1] These journalists see the numbers as garnishes on a narrative point. They're not trying to put the numbers in some sort of mathematical context to draw sound conc…

I've noticed a trend on BBC news. '[X market/stock] slumps as [thing related to X] [does something]' Yet when you go and look at the long-term graph, it's well within normal variance. There's no evidence they're connected at all. I'm sure it happens with other media providers too. Why? Because they didn't have the numbers right, or just didn't check at all. Well, if I'd written a statement like that in an essay durin…

The problem is that "Sellers outnumber buyers as equity markets fall" and "Buyers outnumber sellers as equity markets post gains" are not compelling headlines.

As you've noted, financial news is post-hoc analysis. It is narrative-based, and not fact-based. Sometimes the narratives and facts coincide, though.

Re: Mortgage Market Reopens to Risky Borrowers

#93

Post by JMTQp8lwXL » Wed, Aug 21, 2019, 10:01 PM UTC

pickle-wizard wrote: post #41

tathougies wrote: post #37

As someone who is interested in buying a home. This scares me. We have lots of money saved for our down payment, but I don't want to end up in a bidding war with someone who isn't as good financially, and then end up purchasing for more than the house is really worth. Also, cheap money inflates the prices of homes anyway. Grumble grumble... we will have to stay disciplined and be honest with ourselves as to what the…

I bought my house in Austin 4 years ago in a pretty hot market. The advice I can give is don't let yourself get emotional. If you get outbid on a house, there will always be another one you can bid. I ended up putting in offers on 8 houses before I didn't get out bid.

I've been watching one particular neighborhood within my city (to be more specific, a specific section within a neighborhood), and it's had about 4 sales in the past 3 years. I can only imagine how many of those were investors were deep pockets, and if I'll ever have my day to compete with them. In the meantime, I'll continue building my down payment fund.

The neighborhood is predominantly aging Boomers, so it's possible in a decade there will be increasing sales volume, providing a better opportunity to get in.

Re: Mortgage Market Reopens to Risky Borrowers

#94

Post by gnulinux » Wed, Aug 21, 2019, 10:03 PM UTC

newguy1234 wrote: post #78

frustrated_90 wrote: post #36

Earlier quoted context omitted.

Do you mind shredding some light on where big tech companies are expanding to? I can't seem to find where they're going through Google search.

Nashville tn is one for sure. Apparently the downtown has been revitalized by hipster culture and 'the liberal agenda' as the locals would call it.

I don't understand why and how techies are so strongly associated with the hipster culture in public image. I lived in SF and Boston and techy parts of the town are always more hipster-y; but my personal experience in Berkeley and MIT indicates that the people who work in tech industry are not the hipster-y people. What is going on here? Is this an artifact of gentrification or am I missing something? Maybe a sociologist could help me?

Re: Mortgage Market Reopens to Risky Borrowers

#95

Post by jcomis » Wed, Aug 21, 2019, 10:05 PM UTC

opportune wrote: post #22

Is anybody else making the supposedly foolish decision to time the housing market? I am financially ready to purchase my first home, currently living in the bay area, but I think right now just looks like a bad time. - A lot of housing price growth is seemingly "priced in" since rents for condos/apartments significantly lower than total monthly ownerships costs (mortgage+hoa+insurance+taxes+etc.), even with 20% down.…

Exact same position, but in a different metro area. I've decided to wait. My main deciding factor was if this going to be a "forever" home and I just don't think whatever I would be buying would be.

Re: Mortgage Market Reopens to Risky Borrowers

#96

Post by topmonk » Wed, Aug 21, 2019, 10:06 PM UTC

chiefalchemist wrote: post #83

rayiner wrote: post #6

Earlier quoted context omitted.

The problem is that most journalists are innumerate. As Matt Yglesias notes, "many reporters and editors don't really understand what they're doing. Reputable colleges hand out degrees to people who have almost no understanding of quantitative methods." [1] These journalists see the numbers as garnishes on a narrative point. They're not trying to put the numbers in some sort of mathematical context to draw sound conc…

A start would be that the rest of us stop considering these type journalists. Call them reporters. Call them writers. But journalism is a verb. And if you're not going to act appropriately then you're not worthy of being labeled with the title. Words matter. They shape worlds. Ironic, huh.

Great idea, maybe you could write a report on it.

Seriously, what is it going to matter what a few semi-anonymous comments on the internet are going to say? The news media has all the exposure and presumption of telling the truth, whereas people writing blogs and posting comments do not.

Re: Mortgage Market Reopens to Risky Borrowers

#97

Post by paulcole » Wed, Aug 21, 2019, 10:14 PM UTC

chiefalchemist wrote: post #83

rayiner wrote: post #6

Earlier quoted context omitted.

The problem is that most journalists are innumerate. As Matt Yglesias notes, "many reporters and editors don't really understand what they're doing. Reputable colleges hand out degrees to people who have almost no understanding of quantitative methods." [1] These journalists see the numbers as garnishes on a narrative point. They're not trying to put the numbers in some sort of mathematical context to draw sound conc…

A start would be that the rest of us stop considering these type journalists. Call them reporters. Call them writers. But journalism is a verb. And if you're not going to act appropriately then you're not worthy of being labeled with the title. Words matter. They shape worlds. Ironic, huh.

Journalism is a noun.

Re: Mortgage Market Reopens to Risky Borrowers

#98

Post by mattkrause » Wed, Aug 21, 2019, 10:17 PM UTC

tryitnow wrote: post #26

rayiner wrote: post #6

Earlier quoted context omitted.

The problem is that most journalists are innumerate. As Matt Yglesias notes, "many reporters and editors don't really understand what they're doing. Reputable colleges hand out degrees to people who have almost no understanding of quantitative methods." [1] These journalists see the numbers as garnishes on a narrative point. They're not trying to put the numbers in some sort of mathematical context to draw sound conc…

I think that explains only part of the problem. The other problem is that for-profit media would never have an incentive to hire journalist with quantitative skills. There's very little demand for it outside of trade and professional presses and I would bet media companies would have to pay quant journalist at least twice as much as regular ones. So why should media companies hire and publish quant journalists? There…

I’ve seen more than a few data science-like jobs at the New York Times, and I don’t think all of them were on the business side.

Re: Mortgage Market Reopens to Risky Borrowers

#99

Post by opportune » Wed, Aug 21, 2019, 10:20 PM UTC

gnulinux wrote: post #94

newguy1234 wrote: post #78

Earlier quoted context omitted.

Nashville tn is one for sure. Apparently the downtown has been revitalized by hipster culture and 'the liberal agenda' as the locals would call it.

I don't understand why and how techies are so strongly associated with the hipster culture in public image. I lived in SF and Boston and techy parts of the town are always more hipster-y; but my personal experience in Berkeley and MIT indicates that the people who work in tech industry are not the hipster-y people. What is going on here? Is this an artifact of gentrification or am I missing something? Maybe a sociolo…

My theory is that it's because techies skew young, so they prefer to live in places with lots of other young people, which are usually hipstery places with good food, local cultural events, etc.

Re: Mortgage Market Reopens to Risky Borrowers

#100

Post by bduerst » Wed, Aug 21, 2019, 10:34 PM UTC

opportune wrote: post #22

Is anybody else making the supposedly foolish decision to time the housing market? I am financially ready to purchase my first home, currently living in the bay area, but I think right now just looks like a bad time. - A lot of housing price growth is seemingly "priced in" since rents for condos/apartments significantly lower than total monthly ownerships costs (mortgage+hoa+insurance+taxes+etc.), even with 20% down.…

Bay Area housing is an economic bubble.

One of the signals that the analysts used to correctly predict the housing bubble existing in 2007 was growth rates across mortage payments and rental prices. As mortgage payments grew faster than rental prices, and diverged, you have evidence of a bubble.

Currently in the bay area, the cost to rent and the cost of a mortgage payment for the same type of property are so drastically different that it is a signal we are still in a bubble. So many people jump into owning, only to become "house poor" because of it.

That said, prices are dropping so just be ready to pull the trigger if you find an opportunity.