Days of zero-down mortgages over

[TheBreeze]

Is Fannie Mae no longer guaranteeing or buying zero-down mortgages?

http://www.freep.com/apps/pbcs.dll/article?AID=/20080210/BUSINESS04/802100686

“They were set to close Feb. 15 on their 1,190-square-foot house across the street from an elementary school. But their broker at Citizens First Mortgage called last week and said if they didn’t close by Jan. 31, they would lose the zero-down option.

The rush to close on zero-down deals is the result of a letter that mortgage backer Fannie Mae sent to lenders in December reiterating its rule that requires a minimum 5% down payment on homes sold in declining markets.

Many counties in Michigan and other states are considered declining markets by mortgage companies and banks. That means mortgage brokers cannot sell the zero-down loans to Fannie Mae and Freddie Mac, the two largest backers of home mortgages in the United States. They buy home loans from lenders and banks and sell them as securities on Wall Street.”

This article is local to Michigan, but I would imagine that the January 31 cut-off date would apply nationwide. How many wannabe home buyers in San Diego can afford to put 5% down? Not many I’d bet. I expect to see another big volume drop-off in March or so as another slug of would-be buyers is cut out of the market due to inability to come up with a measly 5% down.

[tickets]

FHA still does zero down, and with increased loan limits you should start seeing a lot of California business going zero down FHA soon enough. And it will cost the taxpayer plenty.

See http://mpra.ub.uni-muenchen.de/5370/

for an analysis of how badly these things default.

[tickets]

FHA still does zero down, and with increased loan limits you should start seeing a lot of California business going zero down FHA soon enough. And it will cost the taxpayer plenty.

See http://mpra.ub.uni-muenchen.de/5370/

for an analysis of how badly these things default.

[tickets]

FHA still does zero down, and with increased loan limits you should start seeing a lot of California business going zero down FHA soon enough. And it will cost the taxpayer plenty.

See http://mpra.ub.uni-muenchen.de/5370/

for an analysis of how badly these things default.

[tickets]

FHA still does zero down, and with increased loan limits you should start seeing a lot of California business going zero down FHA soon enough. And it will cost the taxpayer plenty.

See http://mpra.ub.uni-muenchen.de/5370/

for an analysis of how badly these things default.

[tickets]

FHA still does zero down, and with increased loan limits you should start seeing a lot of California business going zero down FHA soon enough. And it will cost the taxpayer plenty.

See http://mpra.ub.uni-muenchen.de/5370/

for an analysis of how badly these things default.

[HereWeGo]

Moreover, there’s going to be a huge refi boom, as lenders shift their high risk loans to Fannie, Freddie, and FHA loans. The only sticking points are the documentation and the DTI requirements, but those can always be eased.

The only questions in my mind are (1) How will the debt markets respond and (2) do Fannie and Freddie shareholders get anything once those two orginanizations become insolvent and ultimately nationalized?

[HereWeGo]

Moreover, there’s going to be a huge refi boom, as lenders shift their high risk loans to Fannie, Freddie, and FHA loans. The only sticking points are the documentation and the DTI requirements, but those can always be eased.

The only questions in my mind are (1) How will the debt markets respond and (2) do Fannie and Freddie shareholders get anything once those two orginanizations become insolvent and ultimately nationalized?

[HereWeGo]

Moreover, there’s going to be a huge refi boom, as lenders shift their high risk loans to Fannie, Freddie, and FHA loans. The only sticking points are the documentation and the DTI requirements, but those can always be eased.

The only questions in my mind are (1) How will the debt markets respond and (2) do Fannie and Freddie shareholders get anything once those two orginanizations become insolvent and ultimately nationalized?

[HereWeGo]

Moreover, there’s going to be a huge refi boom, as lenders shift their high risk loans to Fannie, Freddie, and FHA loans. The only sticking points are the documentation and the DTI requirements, but those can always be eased.

The only questions in my mind are (1) How will the debt markets respond and (2) do Fannie and Freddie shareholders get anything once those two orginanizations become insolvent and ultimately nationalized?

[HereWeGo]

Moreover, there’s going to be a huge refi boom, as lenders shift their high risk loans to Fannie, Freddie, and FHA loans. The only sticking points are the documentation and the DTI requirements, but those can always be eased.

The only questions in my mind are (1) How will the debt markets respond and (2) do Fannie and Freddie shareholders get anything once those two orginanizations become insolvent and ultimately nationalized?

[TheBreeze]

Hmmm … it does indeed look like there is a way to get a zero-down loan through FHA:

“On Sept. 28, the Housing and Urban Development issued its final rule regarding the use of seller-funded down payment assistance programs. This ruling stated that, effective Oct. 31, HUD would prohibit the use of down payment assistance programs that, in whole or in part, consists of funds provided by any of the following parties before, during or after closing of the property sale: the seller or any other person or entity that financially benefits from the transaction; any third party or entity that is reimbursed directly or indirectly by the seller; or any other person or entity that financially benefits from the transaction.

At that point in time, in order for a homebuyer to use a gift that was derived from the seller, they must have entered into a contract to sell and the contract must have been fully executed and the offer accepted before that date. The Nehemiah Program was excluded from the Oct. 31 date because of a settlement agreement entered into between the Nehemiah and HUD in April 1998. The Nehemiah Program was permitted to go until March 31.

As a result of the ruling making these assistance programs void and leaving homebuyers without down payment assistance, organizations such as AmeriDream and Nehemiah immediately filed lawsuits in Federal Court to challenge the merits of HUD’s rule and seek an injunction blocking the implementation of this rule. On Nov. 1, FHA sent notification that the U.S. District Court now has forbidden FHA to implement the discontinuance of down payment assistance programs. In other words, until further notice, down payment assistance is alive and well.”

http://www.newarkadvocate.com/apps/pbcs.dll/article?AID=/20080119/NEWS01/801190374/1002

Thank God the government is still guaranteeing zero-down loans.

[TheBreeze]

Hmmm … it does indeed look like there is a way to get a zero-down loan through FHA:

“On Sept. 28, the Housing and Urban Development issued its final rule regarding the use of seller-funded down payment assistance programs. This ruling stated that, effective Oct. 31, HUD would prohibit the use of down payment assistance programs that, in whole or in part, consists of funds provided by any of the following parties before, during or after closing of the property sale: the seller or any other person or entity that financially benefits from the transaction; any third party or entity that is reimbursed directly or indirectly by the seller; or any other person or entity that financially benefits from the transaction.

At that point in time, in order for a homebuyer to use a gift that was derived from the seller, they must have entered into a contract to sell and the contract must have been fully executed and the offer accepted before that date. The Nehemiah Program was excluded from the Oct. 31 date because of a settlement agreement entered into between the Nehemiah and HUD in April 1998. The Nehemiah Program was permitted to go until March 31.

As a result of the ruling making these assistance programs void and leaving homebuyers without down payment assistance, organizations such as AmeriDream and Nehemiah immediately filed lawsuits in Federal Court to challenge the merits of HUD’s rule and seek an injunction blocking the implementation of this rule. On Nov. 1, FHA sent notification that the U.S. District Court now has forbidden FHA to implement the discontinuance of down payment assistance programs. In other words, until further notice, down payment assistance is alive and well.”

http://www.newarkadvocate.com/apps/pbcs.dll/article?AID=/20080119/NEWS01/801190374/1002

Thank God the government is still guaranteeing zero-down loans.

[TheBreeze]

Hmmm … it does indeed look like there is a way to get a zero-down loan through FHA:

“On Sept. 28, the Housing and Urban Development issued its final rule regarding the use of seller-funded down payment assistance programs. This ruling stated that, effective Oct. 31, HUD would prohibit the use of down payment assistance programs that, in whole or in part, consists of funds provided by any of the following parties before, during or after closing of the property sale: the seller or any other person or entity that financially benefits from the transaction; any third party or entity that is reimbursed directly or indirectly by the seller; or any other person or entity that financially benefits from the transaction.

At that point in time, in order for a homebuyer to use a gift that was derived from the seller, they must have entered into a contract to sell and the contract must have been fully executed and the offer accepted before that date. The Nehemiah Program was excluded from the Oct. 31 date because of a settlement agreement entered into between the Nehemiah and HUD in April 1998. The Nehemiah Program was permitted to go until March 31.

As a result of the ruling making these assistance programs void and leaving homebuyers without down payment assistance, organizations such as AmeriDream and Nehemiah immediately filed lawsuits in Federal Court to challenge the merits of HUD’s rule and seek an injunction blocking the implementation of this rule. On Nov. 1, FHA sent notification that the U.S. District Court now has forbidden FHA to implement the discontinuance of down payment assistance programs. In other words, until further notice, down payment assistance is alive and well.”

http://www.newarkadvocate.com/apps/pbcs.dll/article?AID=/20080119/NEWS01/801190374/1002

Thank God the government is still guaranteeing zero-down loans.

[TheBreeze]

Hmmm … it does indeed look like there is a way to get a zero-down loan through FHA:

“On Sept. 28, the Housing and Urban Development issued its final rule regarding the use of seller-funded down payment assistance programs. This ruling stated that, effective Oct. 31, HUD would prohibit the use of down payment assistance programs that, in whole or in part, consists of funds provided by any of the following parties before, during or after closing of the property sale: the seller or any other person or entity that financially benefits from the transaction; any third party or entity that is reimbursed directly or indirectly by the seller; or any other person or entity that financially benefits from the transaction.

At that point in time, in order for a homebuyer to use a gift that was derived from the seller, they must have entered into a contract to sell and the contract must have been fully executed and the offer accepted before that date. The Nehemiah Program was excluded from the Oct. 31 date because of a settlement agreement entered into between the Nehemiah and HUD in April 1998. The Nehemiah Program was permitted to go until March 31.

As a result of the ruling making these assistance programs void and leaving homebuyers without down payment assistance, organizations such as AmeriDream and Nehemiah immediately filed lawsuits in Federal Court to challenge the merits of HUD’s rule and seek an injunction blocking the implementation of this rule. On Nov. 1, FHA sent notification that the U.S. District Court now has forbidden FHA to implement the discontinuance of down payment assistance programs. In other words, until further notice, down payment assistance is alive and well.”

http://www.newarkadvocate.com/apps/pbcs.dll/article?AID=/20080119/NEWS01/801190374/1002

Thank God the government is still guaranteeing zero-down loans.

[Author]

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