What is low income, moderate income in Silicon Valley (aka the Real Bay Area)
Palo Alto Online Palo Alto Weekly: Who Palo Alto’s 2,860 homes are planned for (June 11, 2008)
Who Palo Alto’s 2,860 homes are planned for690 homes: very low income (less than $53,050)
543 homes: low income ($53,050 and $84,900)
641 homes: moderate income ($84,900 and $126,600)
986 homes: above moderate income (more than $126,600)
* Income for a family of four
Honestly, if you don’t make at least $84,900 for a family of four, you really shouldn’t be allowed to live here. There should be some sort of income police that checks your W2′s and 1099′s, and has the power to forcibly relocate you to Vallejo or Gilroy if you don’t meet that criteria.
Don’t take it personally. It’s all about protecting community.
June 16th, 2008 at 10:54 am
Yeah, but if you follow your moving van across city lines in a Range Rover or Mercedes GL450, you don’t have to show your tax returns upon entry.
June 16th, 2008 at 11:28 am
>>There should be some sort of income police that checks your W2’s and 1099’s
Effectively, your loan officer should be acting as the compliance officer.
>>and has the power to forcibly relocate you to Vallejo or Gilroy if you don’t meet that criteria.
… or to Austin.
June 16th, 2008 at 4:05 pm
RealEstater – so you’re suggesting that loan officers be paid by the cities they operate in, as a guarantee they’ll strive to meet that expectation? Or you’re just counting on their goodwill?
June 16th, 2008 at 4:55 pm
Ah, those loan officers! Too many people got those toxic loans because they thought their loan officer is a financial adviser too. Hard to imagine a system where a person, who makes living on the commissions of selling loans, is enforcing the laws/regulations of loan.
June 16th, 2008 at 5:30 pm
Hey, I have a great idea to once and for all END the housing crisis in the Bay Area NOW.
How about cities just declare that anyone earning less than $250K a year WILL NOT BE ALLOWED TO MOVE HERE AND THAT THOSE UNDER THAT INCOME MUST LEAVE THE BAY AREA IMMEDIATELY to assure the rich and greedy and the entitled that NOTHING will stop their houses from appreciating to eternity (especially in the RBA). In fact, such a law would restore all of the Bay Area to RBA status FOREVER! That way, folks like RealEstater and WillowGlenner will never ever have anything to bitch about because their housing “values” will be untouchable, and all their neighbors will be rich, rich, rich. Now, that’s utopia!
June 16th, 2008 at 5:47 pm
All I’m saying is that under the current environment of tightening credit, the loan officer should be the first line of defense against giving loans to unqualified people.
June 16th, 2008 at 6:02 pm
But RE, your “should” is just wishful thinking without the proper incentives in place. As Pralay points out, there is a mismatch here. Either loan officer’s compensation is structured in a way that aligns with the greater goal, or another compliance structure must be in place that they answer to. Short of that, it’s illusory to expect anybody to enforce some sort of compliance. I am surprised you point the finger at a specific role rather than at the underlying incentives or at the compliance enforcement structure. It’s human nature to work within and test the boundaries that were established for you, not to create social boundaries for yourself – that’s government’s purpose. Rather than blame human nature, blame the people who misjudged what the behavior boundaries should be then did not adapt nor enforce them adequately.
June 16th, 2008 at 6:06 pm
To clarify my last sentence, blame the governmental branches that were responsible for adapting the loan officer role within acceptable boundaries, or blame the people who should have created that branch if it didn’t exist.
All right, I’ll say it. Blame Bush.
June 16th, 2008 at 6:36 pm
Banks are supposed to have compliance officers who verify that the loans the loan officers signed off won’t hurt their bottom line. The problem there was that the loans were sold as securities so they were no longer the bank’s problem, therefore no compliance review needed.
It always takes government time to catch up with these little tricks, but as DreamT notes, this current administration not only isn’t trying, they’ve defined “ownership society” by privatizing the lawmaking process, too.
June 16th, 2008 at 8:57 pm
DreamT, Madhaus,
In your eagerness to launch your comments, you neglected to see the qualifiers in my post:
1. “In the current environment…”
2. “The first line of defense” (as opposed to the only line of defense)
June 16th, 2008 at 9:05 pm
RE, your qualifiers were not ignored. We described what _under the current environment_ prevents loan officers from being a reliable _first line of defence_: wrong incentives and inadequate compliance structure.
June 16th, 2008 at 9:28 pm
DreamT,
I’m afraid I disagree. Under the current environment, they actually do check your credit score, do check your income, and do require a down payment.
June 16th, 2008 at 10:05 pm
RE – You’re describing how loans are being processed today. We’re discussing structural safeguards to ensure that a “loan officer should be acting as the compliance officer.” Many banks have recently adopted more conservatives standards, yet there is nothing in place that I know of to guarantee that a loan officier acts as a compliance officer – besides the bank’s interest in doing so.
Or are you saying that you’re entirely fine in seeing the banks reverting back to loose standards, without improved governmental structure to enforce compliance, when the economy loosens up again?
June 16th, 2008 at 10:33 pm
DreamT,
I think after the sub-prime fiasco, banks will not sit on the hot stove again. They will be watching out for their own interest, which is a force more powerful than any regulation. In addition, consumers will not sit on the hot stove either, after seeing what happened in places like Stockton.
June 17th, 2008 at 1:34 am
RE – I see that your optimism in the investment potential of real estate extends to people’s ability to learn and remember past mistakes. I appreciate that.
Personally, I am less optimistic: on the consumer side, the victims are typically first buyers; also greed blinds reason (as in the cases where the same person buys many houses simultaneously with different lenders). As for the corporate side, I’d venture that politics often prevail over common sense, particulary when a pot of gold is in the picture. So, I do not believe that the next generation will be any smarter. I do plan to give my kid a clue, though.
June 17th, 2008 at 6:54 am
RE would be correct if we had not morphed into such of a bailout nation. With “privatize the gains and socialize the losses” in play, I’m afraid not enough people actual learn their lessons.
June 17th, 2008 at 9:06 am
As for the corporate side, I’d venture that politics often prevail over common sense, particulary when a pot of gold is in the picture.
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It’s an utopian idea that corporates would work as regulator + profiteer. Enron-like things happened in the past and will happen in future. The only thing will change is the method of committing such crime.
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So, I do not believe that the next generation will be any smarter.
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They would not be smarter, but they will think they are smarter. Lots of crooks took notes from Enron and other corporate trials. They won’t do the same mistakes again, but eventually they will commit other mistakes.
August 2nd, 2008 at 7:08 pm
I have never read such egotistical crap in my life. Count yourself fortunate!!!!!!!!! You could have been one of the very people you’re brow beating. I have the income, and was considering a move to your area. NO THANKS! I won’t want any of you as neighbors!!!!!!!!!
August 2nd, 2008 at 8:31 pm
Was wondering who Social Worker was responding to, when it dawned on me he was responding to burbed.
Why is it that out-of-towners struggle so much with anything that is not first-degree? Fox Networks’ influence?
August 2nd, 2008 at 9:21 pm
Fox is a symptom, not a cause, although at this point it’s a vicious circle.