joseph's avatar
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Housing Crash All Over Again?
Is the New mortgage program from Bank of America similar to the loans banks were giving out causing the crash of 08? Should people be allowed to buy houses with a low credit check? Does this cause more issues instead of solving the problem of trying to give people the chance to buy a house? I believe we will need dive into new types of homes such as "Boxabl" to allow people to buy cheaper homes in the first place with new tech and scaling abilities. Second we need to tackle city laws to allow these types of homes to exist in highly populated areas or cities.
Lastly we need to help people take better care of their personal finances so they can afford to work on their credit, savings account, and investing in second and third stream ways to create income. Let me know your thoughts!
Nathan Worden's avatar
Low / no credit checks make me feel uneasy but if they’re doing a good job of doing income verification and other debt-to-income checks, I can see how the program can really help out people who need it the most.

As long as it doesn’t descend into giving loans to people who can’t afford it (and will ultimately default), I like the spirit of it.
joseph's avatar
@nathanworden i agree if this is meant to help a certain group then it could be a good thing I did see this article though you might want to look at https://www.forbes.com/sites/shaunharper/2022/09/06/new-bank-of-america-loan-could-further-push-black-and-latino-families-out-of-communities/?sh=7c9cdaa82f4c
Nathan Worden's avatar
@jdub Definitely gets complicated fast. Probably best not to celebrate Bank of America’s initiatives until they have proven results. Will be watching this one.
Alex Biestek's avatar
I am all about giving people access to affordable housing, especially in this day and age. HOWEVER, I feel like this is playing with fire and could ultimately end up back firing...heavily. Seems like we're taking a step in the wrong direction.

But don't worry, the Federal Reserve will bail $BAC out when the time comes ;)
joseph's avatar
@acb123 RIGHT!! I agree feels very "08" vibes for sure!
Nathan Worden's avatar
And also big agree on leaning into cheaper homes and using tech to scale housing. Gotta get more cities to approve zoning for this.
joseph's avatar
@nathanworden Exactly Boxabl and other companies should be at the frontline with banks and the city to make the housing market change for the better
Samuel's avatar
@jdub my thoughts are take a really close look at UPST https://www.upstart.com/lenders/credit-decision-api/
joseph's avatar
@sazu what about them?
Samuel's avatar
They are in the process of displacing FICO and I doing so will grant access to credit to traditionally marginalised segments of the population. Product pipeline includes mortgage lending.
Samuel's avatar
Per their CEO: "For the past two decades, study after study has found that African American and Latino communities have lower credit scores as a group than white borrowers.” The CEO said Upstart views potential borrowers as more than their credit scores and has a more inclusive lending model.

“The heart of an AI system is that it keeps learning and is constantly getting better,” Girouard told MarketWatch in an interview. “Someone in my system who might not have been approved a year ago, today, it will approve them, or it might approve them at a lower rate.”

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