DR Horton Inc. (DHI)

All Comments on DHI

  • commenter
    matty2tan
    Jun 27 11:19 AM
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    Jane, I agree wholeheartedly with your comments about renting being a viable option instead of buying, and the effects of bad loans, however, Michael led off his article with a statement that makes it seem like D.R.Horton is the only one "getting around the system" (his words, and not exactly neutral) And yes, if you're making a point about who uses the DP assistance program, it's does matter that you disclose all the participants, like private sellers, and builders, and even public agencies. Highlighing one company out of the dozens, maybe hundreds of entities using DP assistance is not exactly fair. If builders are the largest users of this program, why not say that? Also, a gift DP is always a gift, and never has to be paid back, even if it is rolled into the price-no getting around that. Banning DP assistance would mean the family "gift" rules go out too, because that "no-repay gift" rule is exactly what allows family members, friends, and yes, 3rd party DP assistance providers to provide that gift. Does anyone remember what the original purpose of Nehemiah ( one of the original down payment assistance providers) was-or what it means? Perhaps the rule needs to be amended to eliminate 3rd party gifts? Or, to be on point about using money efficiently, how about bringing back 4-5 month reserves, if you use DP assistance? Reply
  • commenter
    Jane
    Jun 26 03:04 PM
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    Matt, the "gift" from a DPA isn't necessarily something they don't have to pay back. Sometimes it's rolled into the price. I don't think anyone's targeting DR Horton but other articles on this have said builders are the largest users of DPA's. The fact sellers use them too doesn't really matter. What matters is that these purchases are far more likely to go into foreclosure. Bannning DPAs will not ban true gifts from one's family members.

    FHA can't handle the loss and it may fall on tax payers. Getting buyers into homes with toxic financing isn't charitable, it's irresponsible. IMO we're pushed way too aggressively to become homeowners in this country. Renting isn't evil, and sometimes it's a better option. I have been both a renter and an owner. It's astounding how renters are vilified no matter how responsible they may be, no matter how senseless or unaffordable buying may be for them. But we treat them as if they're deadbeats for not owning, then expect them to become shining examples of financial responsibility when they buy a house they can't afford with a loan that's a ticking time bomb.     Reply
  • commenter
    rm
    Jun 26 11:19 AM
    My Website
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    [If a buyer cannot come up with a 3% down payment, they are in no position to handle a sudden rise in taxes or insurance, or any type of emergency repair. ]

    Actually, you've got two factors there:

    1- They're not saving ANY money. If you rent an apartment for $800/month, and you want to buy a $100k home, first and last month's rent gets you more than halfway home.

    2- If they have the down payment and that's all they have, and then they use it for a down payment, they're back to square one, as most average Americans have no savings.

    There are other issues that are contributing to and exacerbating the problem.

    Their lack of a down payment demonstrates their inability to save...     Reply
  • commenter
    nukldrager
    Jun 26 10:54 AM
    Barron's: Public, Not Private Homebuilders Will Prevail [Housing Tracker] [view article]
    Roofs and decks... Reply
  • commenter
    matty2tan
    Jun 26 10:18 AM
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    First of all, why highlight D.R Horton? The down payment assistance you are talking about can be, and is, used by everybody in the business, private sellers included! The FHA is not allowing sellers to "circumvent" the down payment requirement-they are merely allowing gift funds (with no repayment requirement) to be used for the DP. This allows parents, for example, to assist in their childrens home purchase by "gifting" funds". It also allows other parties to contribute to the DP, provided the no repayment requirement is met. And who says that all these buyers can't come up with a down payment? Quite a few have money in the bank, giving them an extra cushion instead of draining the account for a down payment. Why wouldn't you take advantage of a seller paid down payment if you could, especially at todays low rates. Wouldn't you rather pay a tax deductible $30-35 extra a month to keep your $6000-7000 nest egg in the bank in these uncertain economic times? Reply
  • commenter
    notsosmart
    Jun 26 09:14 AM
    My Website
    Barron's: Public, Not Private Homebuilders Will Prevail [Housing Tracker] [view article]
    energy & liquidity will change the landscape of homebuilding & placing.at the moment very murky. Reply
  • commenter
    Georealist
    Jun 25 11:25 PM
    Barron's: Public, Not Private Homebuilders Will Prevail [Housing Tracker] [view article]
    It's difficult to construct a scenario in which any but custom home builders...or very low cost urban rennovation builders have work amounting to anything. Craftsmen would do well to go start small remodeling businesses..homeowners won't be moving up..and many..as in MANY...will come to the realization that the home they are in will be their last.
    The worm has turned and the large tract developers left may prosper in the future building very self sustained communities relying little on expensive transportation or long range provision..this might well include private electrical generation facilities and self sufficient water supplies.
    Homes may well be much cheaper but people are not going to have the money to buy...or make sustained payments in a very iffy economic future.     Reply
  • commenter
    HARM
    Jun 25 02:33 PM
    My Website
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    <i>"The charge from Congress for HUD and FHA is to increase home ownership in the USA."</i>

    Yes, and that very same "charge" was the whole purpose of founding the GSEs back in the 60s as well. And how well has this worked out for the American taxpayer?

    Well, "homeownership&qu... (or more accurately, LOANownership) recently hit an all-time high of 69% of U.S. HHs. Unfortunately, homeowner *equity* also hit an all-time LOW, despite the huge bubble-related gains: calculatedrisk.blogspo...

    Then we have that whole "affordability&qu... thingie. In my state (CA), the median house price-to-HH income ratio recently hit nearly 11:1, is still hovering around 10:1: calculatedrisk.blogspo...

    And what was it before all these wonderful government affordability-promotin... behemoths were around, underwriting bankster risk, and touting their new "innovative" financial products (neg-ams, Option-ARMS, NINJAs)?: closer to 3:1. In line with the historical ratio recommended by fiscally conservative economists and your grandparents' local S&L.

    God Bless the gub'mint and it's myriad of bureaucracies designed to "help" us.     Reply
  • commenter
    CLH
    Jun 25 02:00 PM
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    FHA should be shut down. Who says everyone should buy a house esp. when real estate is going down. Most people should rent and we dont need the gov. for that. Reply
  • commenter
    Jane
    Jun 25 01:32 PM
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    HUD (FHA) did try to shut down some of these down payment programs but they were defeated: Mar. 2008, Sacramento Bee: sacbee.com/103/story/7... ("Sacramento-base... Nehemiah Corp. of America won a key federal court ruling Monday that again blocked plans by the U.S. Department of Housing and Urban Development to ban its controversial down payment assistance program. The housing agency announced in September it would ban the program within months, arguing that it triggered foreclosures and unfairly raised the price of housing for those who could least afford it. Monday's U.S. District Court ruling followed its earlier temporary ruling that HUD had failed to supply a reasoned analysis for its decision and didn't consider reasonable alternatives.")

    The IRS has called some of these programs a scam because they don't operate as non profits under IRS rules. irs.gov/newsroom/artic...

    Other sources over the past few years said down payment assistance programs are a way for sellers/builders to launder money. This is the only way they can make sales, and yesterday a builder was quoted in news about this saying exactly that; that it's the only way they can sell.

    I'm not a fan of HUD. IMO they sat by and watched builders build shoddy new houses and breach the warranty and so long as HUD didn't eat too much of the cost the agency didn't seem to care much. They didn't seem to care if 3rd party home warranty co's were more a marketing tool than actual protection for home buyers either. But when they (HUD/FHA) started having to absorb the PREDICTABLE losses as a result of mortgage fraud, they suddenly started caring about WHY these things were happening. HUD isn't going to ride to any consumers' rescue, but they may be trying to ride to their own. If there's something good that comes out of that for consumers, it's incidental, but I'll take it.     Reply
  • commenter
    vboring
    Jun 25 11:15 AM
    My Website
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    it means that the buyers should be able to afford their loans. it also means that they have no skin in the game. so if the bet goes the wrong way, it is easy for them to ditch the property and let the FHA eat the losses.

    FHA does do real underwriting, right?     Reply
  • commenter
    Joe MacKay
    Jun 25 11:14 AM
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    The charge from Congress for HUD and FHA is to increase home ownership in the USA. HUD and FHA are not and should not be profit making entities. For that portion of the population with earning power to accumulate significant reserves, this type of incentive is un-necessary as their needs are adequately served by the conforming market. Persons on the edge of that portion of our society are best served by a program like FHA which deals with several barriers to home ownership. Two income families are often two income families out of necessity. Often those two incomes can adequately provide for a family's needs, but allow little to no room for the ability to accumulate reserves (money in savings). Or families that have some crisis that is not of their making may fall behind and it is incredibly difficult to crawl back on top to accumulate such reserves. Perhaps it was a child's or other family illness or injury that was not adequately served by insurance if they had insurance. If the credit profile of such a borrower supports that they have regard for their obligations enough to justify the making a a loan, how are we served by eliminating their reserves and thus their ability to survive any financial crisis? The amount of monthly payment increase using a program like Nehemiah, in today's market, is $31.50 per month on a $150,000 home that would otherwise, under FHA, require a $4,500 down payment. Are we better served with that borrower exhausting their savings and being prey to any of the host of crisis that happen in everyday life or having the keep the funds in savings and make a payment that is $31.50 per month more that they would have otherwise?

    FHA's charge is to help Americans by opening the gates to home ownership and to help those on the margin join the mainstream. That will not always be a seamless path. Some will fail. That is why FHA has instituted higher mortgage insurance for those most likely to fail effective July 14th of this year.

    The other falacy is that appraisals are accurate. They are not. They are opinions. Appraisers at best can get close to the real value of a property, but none are so good as to be able to establish absolute value. So, it would not be uncommon for multiple appraisers to arrive at values for a property that could vary by 5% or more. If we are concerned that programs like the Nehemiah program increase home cost, I would make the case that they instead support home values by increasing the number of citizens who can purchase a home and thus help retard home price decreases.

    FHA works.

    Reply
  • commenter
    Muddling
    Investor
    Jun 25 10:53 AM
    My Website
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    "I see disaster! I see lawyers" (Cassandra in Woody Allen's "Mighty Aphrodite").

    FHA will be OK. One way or another. Maybe we, taxpayers, will have to bail it out. Maybe not. Ugly times, ugly solutions. Better than none at all. To all people talking about moral hazard: all that matters in economy is efficiency. Everything else doesn't matter. Economic agents (i.e. people) have short memory, just look at repeating of 1970s oil panic now. Any moral hazard issues which will play ten years from now don't matter either.     Reply
  • commenter
    Malkiel
    Jun 25 10:34 AM
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    "If a buyer cannot come up with a 3% down payment, they are in no position to handle a sudden rise in taxes or insurance, or any type of emergency repair."

    But of course, if the 3% down payment is all of their saved cash, then making the down payment doesn't put them in any better a position to deal with those things. Perhaps the real issue for these low-end buyers is finding a way to get them started with proper cash flow--like making the loan 0% down and then putting 3% in escrow for the first 3 years. Talking about people who can come up with down payments as having magic powers to hold their finances together when others can't is like our mythical belief that throwing people in jail for long periods of time reduces crime. If you're truly interested in solving a problem you have to get serious about how the mechanics of it work...     Reply
  • commenter
    moonbat1775
    Jun 25 09:29 AM
    Is the FHA Effectively Condoning Mortgage Fraud? [view article]
    "Unfortunately our government does not enforce laws or protect the taxpayers. " fbrothers

    I guess the biggest crook would find it hypocritical to punish the smaller ones.     Reply
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