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Even if you’re qualified to buy now the banks couldn’t care less.
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As you might expect, however, there are entrepreneurs who can handle all this. For $1,000 we hire a credit doctor who promises to get our score above 700 within a few months. All they do is get on the phone and harangue the credit agencies until they cry uncle. It sounds a lot like Washington lobbying but seems fair. After all, one phone bill shouldn’t ruin our reputation.
The real problem arises because my income is freelance. Banks have a hard time handling that. Last year I was writing speeches part-time for a U.S. Senator but now my income is all 1099s. “If you still had that W-2 income, it would be much easier,” the bank officer tells me. “These freelance things can end any time.”
“Yes, but my W-2 income did end unexpectedly, while my freelance jobs are still there,” I tell him. “You’re freelancing, too, you know,” I add. “You just don’t realize it.”
He is impressed but says he will have a hard time convincing his superiors.
Nevertheless, after a month of gathering letters from my freelance employers swearing they will keep giving me assignments forever, we are finally ready to move forward. My wife and I attend a bank seminar for mortgage applicants along with a dozen other first-time buyers. We get a huge packet of user-friendly information explaining all the differences between fixed and adjustable rates, 15 versus 30-year payouts, and so forth. Our mortgage officer has a computer app that shows the assessments for all the properties in town. He does a run-through on the property taxes and shows us our monthly payments will be well within our means — a lot cheaper than we’re paying to rent, in fact. Now all we’re waiting for is to hear from that damned bank.
That’s when I start reading about the new Consumer Financial Protection Bureau just gearing up down in Washington. This is Elizabeth Warren’s brainchild — the federal agency that has been given direct access to the Federal Reserve so it will never have to worry about Congressional oversight again. (It’s probably unconstitutional but Chief Justice Roberts may come up with a new interpretation.) As the New York Times tells us:
As part of a continuing overhaul of the home mortgage market, the Consumer Financial Protection Bureau [recently] issued proposed rules to bolster fairness and clarity in residential lending, including requiring a good-faith estimate of costs for homebuyers.
The proposed rules have two central elements — the loan estimate and the closing disclosure — that would provide would-be homebuyers with a simple accounting of likely payments and fees to prevent costly surprises.
Is there anything new to this? We’ve already been overloaded with information. But now the dynamic has changed. With the federal government sitting in as a third party, the banks will become supercautious, even more wary of lending. Instead of risking civil suits from customers, they will be facing federal regulators ready to “crucify” any bank in sight just to set an example — as the EPA administrator recently described it. And if the EPA can impose $35,000-a-day fines on hapless property owners (see recent Supreme Court case), just think what a truly unfettered federal agency can lay on a few jittery banks.
Oh well, we may squeeze through all this just under the wire. If this stupid foreclosing bank comes through before the CFPB swings into full action, we could be making our first monthly payment before Christmas. As for a full recovery of the housing market, however, in this highly overregulated environment I’d say forget about it.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
Was the President done in by the economy, or by the politics of the economy?