That was an excellent article. I would add that all govt-backed loans should explicitly ban any kind of seller credits. These credits seem to be getting pretty outrageous, and it artificially inflates the official selling prices — which are used as comps for the next sale… Same problems as before. The only difference is that the taxpayer is now officially backing these junk loans.
As stated before, selling a house usually costs well over 5-6%. If a buyer only puts 3.5% down, they are underwater from day one.
The **minimum** down payment should be 20%, and credits (both tax credits and seller credits) should be somehow reflected in the official recording of the sale. This is the only way to safeguard the lenders — and the taxpayers who are backing all these mortgages.
