Subject: File No. S7-14-11
From: Quyen Doan

June 29, 2011

I also support a 20% downpayment.

Please see the comments from the NY Times community.

North America
June 29th, 2011
12:19 pm
I'm afraid I missed Ms. Day's point. How long it takes to qualify for the home quoted is not a concern of other taxpayers. This isn't about 'fairness' whatever that means but an agreement between lender and the borrower.

As a citizen, I do not want to participate through my tax liability in anyone's home ownership but my own. Because of the past practices of encouraging everyone to buy a house---or two---I am now participating in the downturn not by choice.

It seems the more we learn the stupider we get. Less than 10% down is an unworthy commitment to home ownership. Let's be adult folks.

June 29th, 2011
12:19 pm
From the blog: "The Center for Responsible Lending, which has been vociferous in urging financial reforms to protect borrowers, argued that 20 percent down, or even 10 percent down, would price many homeowners out of the mortgage market. "

This group has no financial sense. If many homeowners are priced out of the mortgage market, that shows that house prices are still too high. Rather than trying to "stabilize" the bubble prices, wouldn't it make sense to let prices fall to a level where people can actually afford to put 20 percent down?

The Center for Responsible Lending isn't doing anyone a favor by supporting policies that saddle working-class people with massive loan debt.

And, yes, 20 percent should be the requirement. Without skin in the game, people will just walk when their speculative purchase declines in value.

Boston MA
June 29th, 2011
12:22 pm
"20 percent down, or even 10 percent down, would price many homeowners out of the mortgage market"... well, yes. Isn't that the point? Home ownership is not a right. It's a huge financial responsibility that people should NOT undertake if they can't afford it.

If someone needs 14 years to save up a 20% down payment, simple math says they've only been able to save 1.43% of the home's value per year. There's no way they're going to be able to make their mortgage payments It'd take them 56 years just to pay off the other 80% of the principal, and that's not even considering the interest

The hypothetical schoolteacher in this situation should not be buying a house. They should rent instead. It's no kindness to let people take on a bigger mortgage than they can afford.

June 29th, 2011
12:19 pm
Why isn't it a surprise that the 20% proposal is opposed by the coalition of "banks, real estate agents, and consumer advocates"? Their goal is to increase the number of borrowers, regardless of the risk, a risk borne by the borrowers, of course.

As said by the broker trainer to the trainees in Liar's Poker (1987), "We don't want more customers we want more transactions."

The truth is that a huge price has been paid for our society's emphasis on home ownership, and it has been paid by those marginal borrowers who can least afford it.

Let's keep the down payment requirement at 20% where it belongs.

June 29th, 2011
12:22 pm
The real issue is why would someone earning $33k buy a $173k home? That's over 5x their income. Also, 14years to save $17k means they are only saving $25/week for the down payment, or less then 4% of their gross income. If they bought a $100k home, which is reasonable price range for that income level, and saved $50/week, they could put down 10% in under 4 years. They could do 20% in under 8. Haven't we learned anything from the crisis???