This page has been archived and commenting is disabled.

Freddie Mac Launches "Three Percent Down" Mortgages To Lure Millennials

Tyler Durden's picture




 

On Friday we noticed a disturbing glitch in the matrix, when in a deja vu from the peak days of the last housing bubble, we showed that in the Las Vegas market, builders such as Lennar, are rushing to dump new construction to potential purchasers with the "unbeatable" offer of zero money down.

 

One key reason for this sudden panic in the housing market is that the Fed's rate hike gambit backfired: with economists far and wide expecting rate hikes, the expectation was that potential home buyers would rush to buy homes ahead of rising rates. Not only did this not happen as Wells Fargo's mortgage application data confirmed...

... but now mortgage rates are sliding back to 2015 lows, removing any sense of urgency from the demand side of the pricing equation.

So what is the alternative? Pushing the supply into overdrive, of course, and doing more of precisely what got the US financial system (and the bailed out GSEs) in trouble in the first place: handing out virtually free housing, and since the purchase price has to be funded somehow, today Freddie Mac, together with Quicken Loans, announced a new lending program, one which would enable "eligible borrowers" and focusing on millennials, to finance a house with a "down payment of as little as three percent."

Because what better way to "boost" US housing than by targeting millennials, most of whom are simply unable to obtain good, well-paying jobs (and thus the need for 3% down mortgages), with offers which few can pass by, and lock them down with even more trillions in debt on top of their $1+ trillion in student loans.

From the release:

Freddie Mac and Quicken Loans Enter Partnership to Make Home Financing Accessible for New Buyers

 

New Effort Dedicated to Building a Better American Housing Finance System Through Innovative Lending Solutions and Ongoing Education for Homeowners

 

Freddie Mac (OTCQB: FMCC) and Quicken Loans, the nation's second largest mortgage lender, today announced a partnership to pilot several new initiatives aimed at helping provide more Americans the opportunity to achieve homeownership, while also building a smarter American mortgage finance system.

 

The program will feature unique, co-developed products to meet the needs of emerging markets, including millennials, first-time homebuyers and middle-class borrowers. It will explore numerous modifications and expansions to Freddie Mac's current Home Possible mortgage products, and will also include continued homebuyer education. Home Possible enables eligible borrowers to finance a house with a down payment of as little as three percent.

The new Freddie Mac/Quicken Loans partnership was announced at the Mortgage Bankers Association's 102nd Annual Convention and Expo in San Diego, CA.

 

News Quotes: Attribute to Dave Lowman, Executive Vice President, Single Family Division, Freddie Mac:

 

"We are proud to join Quicken Loans in a new partnership dedicated to increasing homeownership opportunities and simplifying the process of originating and delivering high quality mortgages. The partnership has a simple goal. We are leveraging our unique strengths to explore simple straightforward approaches to mortgage products, technology and borrower outreach strategies. We then hope to use the results from these efforts to make it easier for all of our customers, and the industry, to make successful homeownership possible for a wider range of qualified borrowers."

 

"Today's announcement marks one more way Freddie Mac is engaging with its customers to help them innovatively build stronger businesses and a stronger housing finance industry that expands affordable housing opportunities for America's families."

What remains unanswered is why rush? Surely, "3% down mortgages" are just a teaser to the infamous "zero percent down" which is just around the corner.

But wait, there's more, because once the US goes NIRP (whether organically or as a violent reaction to the Fed rate hike in nearly a decade), borrowers will actually be paid to take out a mortgage. Just like in Denmark.

And everyone will live happily ever after.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 10/19/2015 - 12:18 | 6685289 NoDebt
NoDebt's picture

Well, I guess it's time for me to go back to flipping houses for fun and profit (and eventual bankruptcy).

Mon, 10/19/2015 - 12:23 | 6685317 OrangeJews
OrangeJews's picture

This is so last week.  A friend bought a house in October with 3% down at 3.5% on a $250,000 through Ryland here in Vegas.  Wake me up when it's 0% down, 0% interest for everyone.

Mon, 10/19/2015 - 12:27 | 6685336 Ignatius
Ignatius's picture

Wake me when it's 0% principal.

40 acres and a mule for everybody (oh, and some water, almost forgot the water).

Mon, 10/19/2015 - 12:30 | 6685354 Haus-Targaryen
Haus-Targaryen's picture

I was in Atlanta and saw a "neighborhood" with a "Buy Here Pay Here" sign in front of it.  I shit you not. 

Mon, 10/19/2015 - 12:59 | 6685512 OrangeJews
OrangeJews's picture

Ollas are amazing in dry conditions.

Mon, 10/19/2015 - 13:01 | 6685522 Haus-Targaryen
Haus-Targaryen's picture

This plus every asshole on Facebook right now:

"So Joel and I are going to start our house flipping business. Its been a tough road, and neither of us have been able to get a job, and with student loans -- we needed to try something new.  Wish us luck & keep us in your prayers.  Special Thanks to Debb & Todd XXXX (Her hubby's folks) for lending us the money to make this happen.  We don't let you guys down." 

How many different ways can you say "FUCKED!?"  

Mon, 10/19/2015 - 13:25 | 6685639 Groundhog Day
Groundhog Day's picture

I googled it...6500 languages

Mon, 10/19/2015 - 14:11 | 6685867 eatthebanksters
eatthebanksters's picture

Wait, record low interest rates and now super low down payments....didn't we already go down this road?  And didn't we totally get fucked as a result.  Turning the home ownership market into a Lehman leveraged fiasco does not sound like smart business to me.  I guess the gubmnt is pulling out all the stops to ensure the meltdown does not happen on Obummers shift.

Mon, 10/19/2015 - 15:32 | 6686247 Four chan
Four chan's picture

when your product is worthless and printed out of thin air who knows what level depravity the printers will create?

Mon, 10/19/2015 - 18:34 | 6687091 N2OJoe
N2OJoe's picture

Well at least when this all blows up, we'll be able to pick up a place on the cheap... Assuming our rent from the county isn't too high to force us into a tax sale.

Mon, 10/19/2015 - 15:13 | 6686157 gimme soma dat
gimme soma dat's picture

The number of people getting real estate licenses around here is staggering.  

Mon, 10/19/2015 - 13:01 | 6685520 Antifaschistische
Antifaschistische's picture

why were they honest with the title and admit the 3% is not an attempt to get you into a home, it's a desperate attempt to keep prices inflated just like the bond market...knowing how sensitive the entire housing bubble has become to interest rates.

Mon, 10/19/2015 - 15:07 | 6686128 swmnguy
swmnguy's picture

Exactly.  The monthly payment is all anybody with any sense worries about.  And actually, a higher interest rate allows a buyer to benefit if he can make accelerated payments directly to the principal.

Mon, 10/19/2015 - 12:43 | 6685414 Son of Captain Nemo
Son of Captain Nemo's picture

40 acres and a mule for everybody (oh, and some water, almost forgot the water).

I

You just said the magic word with the "w"!...

If you and your mule want to hydrate yourself that will be 38% Federal and State for every 1 liter of the liquid you require to sustain you and the animals life!

This is why N-E-S-T-L-E-S doesn't make the very best of anything anymore when they steal it from someone else and control it!

By the way?... The price of that chocolate bar just went up another 40 cents as well!

Mon, 10/19/2015 - 13:29 | 6685661 Bunga Bunga
Bunga Bunga's picture

Yaeh, neg am-zero down-zero rate-credit score 550-loans! Fully insured by the tax payer. It will be much better than in 2005. We have seen nothing yet.

Mon, 10/19/2015 - 14:14 | 6685884 Dig Deeper1
Dig Deeper1's picture

Why not go beyond full retard and allow the potential "homeowner" to roll their combined student loan debt on top of their mortgage and lock in 3.5% for SIXTY YEARS.

Call it the American Dream Plan or some such thing and have ADP withhold a special housing and education allowance from their weekly earnings to equal their monthly payment.  Millenials will be all set but their kids will be royally phucked.

Mon, 10/19/2015 - 14:37 | 6685984 Ignatius
Ignatius's picture

Damn, you guys, just one great idea after another.

You guys aren't secretly loan officers, are you?

Mon, 10/19/2015 - 13:15 | 6685597 Normalcy Bias
Normalcy Bias's picture

Ryland? I hope your friend is handy. Although it's been a while, I've seen Ryland houses that were only a year old, but were already falling apart.

Mon, 10/19/2015 - 17:49 | 6686894 Antifaschistische
Antifaschistische's picture

lol...yes, how in the heck can a Ryland, etc..new home come with a ONE year warranty. LOL. Here, give us $275,000 in cash, but we'll only guarantee this thing for one year. HOW STUPID ARE THESE CONSUMERS!!

In Houston, I've lost track of the friends/employees etc..who have had to dump over 10k into a home that was less than 2 years old.

Mon, 10/19/2015 - 12:35 | 6685368 yrad
yrad's picture

Love ya ZH, but wondering why mortgage apps decline Oct - Feb is like wondering why Tickle me Elmo sales are up in Dec.

Use your head, Tyler!

 

P.S. 3.5% down payment FHA loans have been around for over 10 years.

Mon, 10/19/2015 - 12:52 | 6685474 plane jain
plane jain's picture

Annual gross income X 2.1 = amount of house you can afford.

2014 Median Household Income: $53,657 X 2.1 = $112,680

Jan 2015 Median Sale Price Existing Home: $197,600

Jan 2015 Median Sale Price New Home: $292,000

Sure, a lower down payment will make it all better.

Mon, 10/19/2015 - 13:56 | 6685803 pelican
pelican's picture

As a GenX to Millennials... DON'T DO IT.  It is a giant fucking scam.  I know so many people in my generation who lost everything just trying to live in a small home.  Many of the homes still have not been foreclosed upon AFTER 6 YEARS.  

 

The housing prices are fake, the banks are hiding the number that are in foreclosure and the industries that support your community can disappear overnight based on the whims of the government or corporations. 

Buy a good car instead.  That will allow you to travel with the jobs.  Make sure you can sleep in it when it comes down to it.

 

 

 

 

 

 

Mon, 10/19/2015 - 14:17 | 6685880 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

There's one on my street that's been vacant for years now. They tried selling it last year but gave up. A window was busted out a few weeks ago and no one has done anything about it. It'll probably be set on fire someday and that will be the end of it. Meanwhile our taxes are up again this year...

It would have made a nice house for a young couple starting out.

Mon, 10/19/2015 - 14:22 | 6685918 plane jain
plane jain's picture

I upvoted you. Totally agree about the car.

A house as an investment, i.e. a vehicle for profit, pretty risky.

As a hedge/place to sleep indoors it isn't so bad.

We bought a house less than that 2.1 times income, less than the median existing home price too. Yeah, depreciation/taxation/interest etc. I know. Know about moving because of a job...moved 13 times in 15 years.

On the other hand if/when the paper game fails, or absolutely when SS payments aren't enough to keep a person from sleeping in the street I think the average person will be glad to have a house and sleep out of the weather. Maybe someone will come to kick you out and take it, but odds are they won't get us all.

Mon, 10/19/2015 - 15:43 | 6686306 Dig Deeper1
Dig Deeper1's picture

Looks like someone failed their RE license exam.  Can't we all just get aloan? - R.King.

Mon, 10/19/2015 - 13:47 | 6685762 NoVa
NoVa's picture

not widely known but it is public record, Quicken and DOJ have sued each other over FHA lending practices.  Quicken has moved away basically stopped from FHA lending (a big hurt to GNMA).

Hence, Quicken & Freddie are strikinig a deal to flow FHA loans into Freddie, away from GNMA.

 

NoVa

Mon, 10/19/2015 - 13:18 | 6685608 JerrySpringer B...
JerrySpringer B All Over This Shiznit's picture

oh yeah bringin back memories...quite the hustle

Mon, 10/19/2015 - 14:58 | 6686085 world_debt_slave
world_debt_slave's picture

yep, I was house hunting in the midwest this last week, rent is going skyhigh, I qualify for a 0 down 3% something interest 30 year fixed VA loan. All the houses I visited on the market are either bank foreclosures or owned by realtor or investment company, vacant houses that have been sloppily remodeled or sold AS IS.  There are some for sale by owner, but they are all priced above 2007 levels.

Mon, 10/19/2015 - 12:18 | 6685290 aliki
aliki's picture

really wanna suck 'um in ... just wait til NIRP (i seriously cannot wait to see how my governor in NJ deal with that: on 1 hand, he is attempting to rail against the feds ZIRP policy. on the other hand we just got crowned #1 in foreclosures in the nation).

not a matter of if, but when. NIRP + QE4 = keynsian nirvanna.

i can just see larry summers rubbing it all over himself during a live CNBC interview now.

Mon, 10/19/2015 - 12:23 | 6685321 Zero-Hegemon
Zero-Hegemon's picture

Yup, go to zillow.com and look at any area, the blue dots all represent pre-forclosure or foreclosure. Holy cow, NJ has a lot of blue dots.

Mon, 10/19/2015 - 12:46 | 6685441 astoriajoe
astoriajoe's picture

I noticed that too on Trulia. I thought it might be an adjustment in the way they display the search results. 

Mon, 10/19/2015 - 13:46 | 6685757 Zero-Hegemon
Zero-Hegemon's picture

Sure, a "seasonal" adjustment

Mon, 10/19/2015 - 14:18 | 6685900 RafterManFMJ
RafterManFMJ's picture

Hey, is the 4th turning a season? I'm sure it is.

Mon, 10/19/2015 - 16:11 | 6686460 Zero-Hegemon
Zero-Hegemon's picture

Tagline for the movie "The 4th Turning": "when quadruple seasonal adjusments just aren't enough..."

Mon, 10/19/2015 - 16:50 | 6686619 pelican
pelican's picture

According to Zillow 1/2 the homes listed are in foreclosure from my home town in N.   I know for a fact that is wrong because I know of more homes in foreclosure. 

 

I blame that smuck Corzine and Lausenberg for doing nothing to prevent the closing of Ft. Monmouth.

Mon, 10/19/2015 - 12:24 | 6685331 Amish FinEng
Amish FinEng's picture

We just had a customer leave our custom cabinet shop and they said that they bought a new home with 5% down and a 6% fixed with a balloon, their old house will be foreclosed on in 2 months and they are letting it go. The new house gets a custom set of cabinets.

You fucking English are weird. Why tell me about your god damn credit schemes?

? WTF?

Mon, 10/19/2015 - 12:41 | 6685413 aliki
aliki's picture

amish - i still have no clue as to why on earth after what we went thru in 2008 that we haven't tied our real estate laws to those of canada. i do believe up there you CANNOT walk on a mortgage. to your point, how people are able to walk on 1 house, flee their obligation, and then take on a new 1 is way beyond my level of common sense. its politically poplular no matter who gets fucked so i guess theres my answer.

Mon, 10/19/2015 - 12:53 | 6685489 Amish FinEng
Amish FinEng's picture

I cannot believe I live in such a perverted country.

Trump does have one thing right, building walls are good. Time for the Amish to construct one around Lancaster, PA.

Obama. You're paying for it!

Mon, 10/19/2015 - 16:44 | 6686604 buzzkillb
buzzkillb's picture

Juggle family members. I grew up where most of these scams originate from. The worst thing that happens is the family flees the country and goes to live big back home.

The thing I can't figure out is didn't we just go through this less than 10 years ago with less than stellar results? When housing bottomed out around 2011ish it was nice to see mortgages being reviewed, houses still sold, and things just felt better. Now we get back to the whack job to the moon bubble practices. We bought during that time period as I thought no way would that bubble stupidity happen again. And now it looks like I have to think about selling into the upwards spiral before this whole thing crashes. Truly unbelievable. How many years can this 0% down go on before the next crash?

The preforeclosure dots on zillow are heavy everywhere in Los Angeles. But houses are still selling fast in any halfway decent area.

Mon, 10/19/2015 - 12:42 | 6685415 Bruce Gender
Bruce Gender's picture

Governor Chris Crisco will waddle up to the podium and give some asinine speech which probably ends with something about 9/11 and more government surveillance.

 

He should stick to Shake Shack and telling Tesla they can't sell cars in NJ.

Mon, 10/19/2015 - 23:37 | 6688162 SeattleBruce
SeattleBruce's picture

+1 for your avatar...LOL.

Tue, 10/20/2015 - 00:06 | 6688219 Bruce Gender
Bruce Gender's picture

"We're all different and that's not a bad thing......it's a good thing!"

Mon, 10/19/2015 - 12:20 | 6685294 knukles
knukles's picture

Fuck yeah!  The exact same business practices the Feds used as an excuse to shut down the private mortgage lending sector in order to subsume the entire industry.
(Sure made GM cars safer and more energy efficient, too, what with the sales of those 100,000's of Volts per month. ..... Assholes)

Mon, 10/19/2015 - 12:20 | 6685297 KnuckleDragger-X
KnuckleDragger-X's picture

The mortgage comes with a 55 gallon drum of lube and the handbooks "How to Enjoy Anal' and "BSDM for Dummies".......

Mon, 10/19/2015 - 12:20 | 6685301 PoasterToaster
PoasterToaster's picture

Gen Y is a dead end.  But hey, keep hope alive you shitheads. lol

Mon, 10/19/2015 - 12:20 | 6685302 gimme soma dat
gimme soma dat's picture

Is anyone creating purchase contracts translated to spanish and arabic, yet?  

Mon, 10/19/2015 - 12:35 | 6685377 KnuckleDragger-X
KnuckleDragger-X's picture

You don't have to be able to read them, just be able to put your 'X' in the right places.....

Mon, 10/19/2015 - 12:20 | 6685304 Dr. Engali
Dr. Engali's picture

The wheels on the bus go round and round.....

Mon, 10/19/2015 - 13:03 | 6685530 gmrpeabody
gmrpeabody's picture

classic...

Mon, 10/19/2015 - 12:21 | 6685306 yogibear
yogibear's picture

More games to boost housing baby-boomers are are dumping.

Need more government section 8 housing for the 100s of thousands of people designated as refugees.

Mon, 10/19/2015 - 12:23 | 6685320 gimme soma dat
gimme soma dat's picture

This, yes. Free shit for everyone!  (except native-born Americans) 

Mon, 10/19/2015 - 12:21 | 6685307 Zero-Hegemon
Zero-Hegemon's picture

It's the shot in the arm we need!

Mon, 10/19/2015 - 12:24 | 6685330 Winston Churchill
Winston Churchill's picture

Its the hot shot in the arm we need.

FIFY.

Mon, 10/19/2015 - 12:28 | 6685345 Zero-Hegemon
Zero-Hegemon's picture

Kickstart my Keynesian heart

Mon, 10/19/2015 - 12:22 | 6685310 gimme soma dat
gimme soma dat's picture

Can the room color and decorations be changed according to which gender a person feels they are on any particular day? 

Mon, 10/19/2015 - 12:23 | 6685311 CheapBastard
CheapBastard's picture

Sell as many houses as you can irregardless of downpayment, job, assets, ability, etc ... then takes yo' profits+commissions+bonuses ...  and then pass the mortgage losses on to the 'Everyday American' Taxpayer.

 

Brilliant!

Who say Americans not be Exceptional?!

Mon, 10/19/2015 - 12:24 | 6685332 Zero-Hegemon
Zero-Hegemon's picture

Now buying a home is just like paying for college!

Mon, 10/19/2015 - 12:25 | 6685334 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

"It's a big club and you ain't in it"

Mon, 10/19/2015 - 12:31 | 6685357 Ignatius
Ignatius's picture

I see you've read the script (cue angelic horns).

Mon, 10/19/2015 - 12:23 | 6685318 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

More proof that the psychpaths of finance understand exactly what they are doing to us.

 

Remember this the next time you see one of these bankers confronted with the evidence and they sit there acting condescendingly confused about how to best correct their questioner's wrong-headedness.

Mon, 10/19/2015 - 12:27 | 6685338 Kaiser Sousa
Kaiser Sousa's picture

you got it fucking- A - right man...

the MoneyChangers die without the ability to feed off debt slaves...

same shit that lead to 08'...

then of course they changer the rules and take all ur shit back...

DEATH TO THE MONEYCHANGERS......

Mon, 10/19/2015 - 12:33 | 6685371 Ignatius
Ignatius's picture

"Nobody saw this coming."  Rinse.  Repeat.

Mon, 10/19/2015 - 13:13 | 6685585 Bruce Gender
Bruce Gender's picture

Too bad nobody will ask Bernanke real questions on his book tour.

 

A nice interview of Bernanke on CNBC back in July 2005 https://www.youtube.com/watch?v=9QpD64GUoXw

 

In other words: "it's all contained", and just as when Maria Bartiromo asked him in July 2005 "what is the worst case scenario if prices come down substantially", so now his response, as then, is "I guess I don't buy your premiseit's a pretty unlikely possibilityWe have never had a decline of house prices on nationwide basis."

 

http://www.zerohedge.com/news/2013-02-22/bernanke-there-no-bubble

Mon, 10/19/2015 - 13:43 | 6685746 SillySalesmanQu...
SillySalesmanQuestion's picture

Real questions only get you fired, blacklisted, threatened, hot tubbed, nail gunned, or other forms of sucided...

Mon, 10/19/2015 - 13:54 | 6685792 NotApplicable
NotApplicable's picture

Besides, it's blatanly obvious that Bernanke is not equipped to answer any real questions, as that ole lip quiver of his gives him away every time he tries his hand at sophistry.

Maybe he should try passing out like Old Yellen does?

Mon, 10/19/2015 - 12:23 | 6685324 yogibear
yogibear's picture

Public union pensioneers need for more people to pay their bloated pensions.

You never really own your house, you lease it from the country.

Mon, 10/19/2015 - 12:24 | 6685325 Kaiser Sousa
Kaiser Sousa's picture

WARNING! BANNANA IN THE TAILPIPE CROSSING!

 

Mon, 10/19/2015 - 12:24 | 6685327 taopraxis
taopraxis's picture

Leverage yourself up to your neck to buy an illiquid depreciating asset with a high cost of carry...what can go wrong?

Mon, 10/19/2015 - 12:25 | 6685333 ChargingHandle
ChargingHandle's picture

Millennials still will not qualify. They have way too much student loan debt and lack any housing history because they've lived in mom's basement for the last decade

Mon, 10/19/2015 - 12:41 | 6685410 corporatewhore
corporatewhore's picture

All the regulatory authorities need to do to fix  this dti problem is recognize the incrome based repayment dollar amount rather than the 1 or 2 % of the outstanding balance per month.

Game solved.  Debtitude foeva!

Mon, 10/19/2015 - 12:48 | 6685446 Son of Loki
Son of Loki's picture

"Don't ask, don't tell," is the new NAR/Banker/Mortgage Policy. This will help those who consider themselves 'Trans-debtors.'

Mon, 10/19/2015 - 15:40 | 6686290 Arnold
Arnold's picture

Linda Green is back at work after a short sabbatical.

Mon, 10/19/2015 - 13:04 | 6685533 RopeADope
RopeADope's picture

Millennials have Facebook accounts so will qualify for government mortgages. Remember, if you hook yourself up with the surveillance state you will be rewarded like all good Stasi informants.

Mon, 10/19/2015 - 12:26 | 6685337 Joebloinvestor
Joebloinvestor's picture

They should offer to pay the wortgage for a year just to really skew the data.

From an asset to a write off as long as it takes a fiscal year.

Mon, 10/19/2015 - 12:27 | 6685341 Dr. Engali
Dr. Engali's picture

It's fucking amazing how people can get lured into the same scam over and over again. #Unfuckingbelievable. 

Mon, 10/19/2015 - 12:42 | 6685388 Ignatius
Ignatius's picture

Never thought a criminal career path could be so profitable and safe from prosecution.

Mon, 10/19/2015 - 13:55 | 6685799 NotApplicable
NotApplicable's picture

But it's a RECOVERY, duh!

Mon, 10/19/2015 - 12:27 | 6685342 Nue
Nue's picture

And if you don't have the 3% They'll loan that to you in a seperate loan as well.

Mon, 10/19/2015 - 12:33 | 6685372 Bill of Rights
Bill of Rights's picture

Millennial 1 : dude did you hear? They're giving 3% down mortgages ( puffs on joint )

Mellennial 2 : ( puffs on joint ) dude what's a mortgage ?

Mom : ( yelling ) you gonna spend your whole goddam day in the basement or what!!!

Mon, 10/19/2015 - 14:54 | 6686073 semperfi
semperfi's picture

"MOM!  MAKE ME SOME MEATLOAF!"

Mon, 10/19/2015 - 12:35 | 6685380 ghostzapper
ghostzapper's picture

The same exact system of fraudulent convertible debt is used throughout the mortgage industry.

When you create a mortgage, it is never credited to you— it is registered in YOUR NAME— as being

owned by a government franchise operated under your name, but not belonging to you. Remember

that the governmental services corporation is the owner of YOUR NAME, which is the incorporated

franchise they are running for their own benefit under your name without your knowledge or consent.

So you walk in to close what you are told is a loan being made to you, and what happens? The bank

takes your Promissory Note, which has Actual Cash Value, just like a stack of bank notes, and they

cash it. That’s payment Number One, charged off against “the government”, which of course passes

the entire cost back to you and your brethren in the form of taxation. Then the bankers come back

under false pretense that they actually loaned you something, and demand that you pay them back

principal and interest for thirty years and claim that you also owe them a security interest in your

property (which you gave them, albeit under conditions of fraud and deceit and non-disclosure) which

they can foreclose upon if you fail to perform. That’s payment Number Two—so, in effect, the banks

charge you once, then charge you twice, plus interest, plus a security interest that is undeserved—and

you fund all of it. You fund the first payment through your taxes to the “government” and you fund

the second through more of your labor “donated” to the account of YOUR NAME and what really, did

you receive?

You received access to credit in a bank account held in YOUR NAME, but not actually belonging to you,

and you spent that credit on a home and property that is recorded in YOUR NAME but which doesn’t

actually belong to you, either. Both the purported debt and the property belong to the governmental

services corporation’s franchise. You are just an unpaid volunteer, doing all the work and producing all

the credit to fund these operations, for the benefit of the franchise.

 

Mon, 10/19/2015 - 12:44 | 6685428 swmnguy
swmnguy's picture

"You" are merely a debt sink.  Really, it's just your Social Security number that matters.  All manner and quantity of debt are assigned to your SSN.  From that, "money" can be created.  Actual economic growth isn't possible anymore, with money being debt at interest.  So the system has to consume itself, to keep creating "money".  It's been obvious for some time that all the debt cannot be paid back at interest, so it would be best to cancel most of it out and re-set the system.  This would impoverish a lot of paper millionaires and billionaires, however, which is why it will never happen until it simply happens on its own.  And even when it happens, it won't be admitted and acknowledged for a long time.  

I bought my house from a flipper.  Apparently, the owner prior to the flipper had mortgaged the hell out of it, then stopped making the payments, was foreclosed, and walked away.  Then, oddly, he was murdered in a pawn shop heist gone wrong (he was a completely innocent bystander).  I still get collection letter to his name, even though he's been dead a little over 6 years, and walked away from this house over 8 years ago, and the title has changed hands 3 times since.  Yes, I paid extra for the complete title search and insurance that actually does cover me.

My point in telling this story is that the dead guy's debt is still on somebody's books as a collectible asset, the basis for some of the money which has been created and is in circulation.  The truth is, he's not going to pay his debt, and his assets have already cleared the market at least twice since his death.  That debt is never going to be repaid.  But so many people have such a stake in pretending his debt might someday be paid, it's going to take a long time for his debt to be expunged.  

Multiply that by several hundred million Social Security numbers, and you have an entire socio-economic system based on make-believe.  Hedge accordingly.

Mon, 10/19/2015 - 12:54 | 6685490 ghostzapper
ghostzapper's picture

One thing anyone can easily do is to file a UCC1 Financing Statement against the Straw Man the Banksters were kind enough to create in their name upon their birth. Yup, you became a franchise corp when Mommy signed that Birth Certificate. 

Make sure you pay the electric bill Granny:

(this is from the same source)

The most typical example is the billing you receive every month for electrical service (at least in America this is true). What appears to be a bill comes addressed to YOUR NAME in capital letters and your address. Unknown to you, this “billing statement” isn’t really a true bill and it isn’t addressed to you. It is addressed to a franchise of a governmental services corporation and the “statement” is actually a voucher allowing you to cash in a “dividend” equal to the amount shown as due and owing– but of course, you are never told this and you are never told how to fill out the coupon for credit. Instead, if you don’t submit payment you are threatened with disconnection, and in this way, you are coerced into paying the bills of a governmental services corporation’s franchise. Of course, the utility company submits the bill each month directly to the “government” and gets paid for servicing the franchise. That’s payment Number One. Then they send you a billing statement and coerce you to pay it. That’s payment Number Two. They establish a “capital credits account” in YOUR name and deposit your payment in that account. They then use that money as investment capital benefiting their utility company and prevent you from accessing the capital credit account you funded. In some cases, the utilities are so crooked they set the “capital credits” aside and later claim that they are “unclaimed funds” and abscond with them directly. Fraudulent convertible debt always involves a double-dipping system in which a charge gets paid for twice by different parties. In effect, it gets you, the consumer, both coming and going. You are on the hook to pay for the “government’s debts” — so as a group you paid for payment Number One, and as an individual you were forced to provide payment Number Two as well. The same exact system of fraudulent convertible debt is used throughout the 

Mon, 10/19/2015 - 12:36 | 6685382 swmnguy
swmnguy's picture

People don't realize that a low interest rate actually makes homebuying more expensive.  It allows the underlying price to rise.  People look at the overall monthly payment, if they have any sense.  Higher interest rates mean lower underlying prices, and vice-versa.  At least with high interest rates a buyer has a strong incentive to pay off the mortgage ahead of schedule.  People bought and sold homes in 1980, with 18% interest rates.  They were able to get an 18% return on their money by making extra payments against the principal.  I'm doing it now, but only getting a 4.5% return.  Still, where else can I get a guaranteed 4.5% return on my money?  I'm not looking to become a real estate tycoon, mind you.  I just want to have enough equity to borrow against in the short term when I need to, and in the long term, to trade this house for a much smaller one when my kids move out.  That seems quite feasible.

Nobody who can't buy a house at 5% interest can do it at 3%, either.  This is just a game of hot-potato.

Mon, 10/19/2015 - 12:37 | 6685394 Joebloinvestor
Joebloinvestor's picture

The "Fab" may be available to sell bundles of this shit to stupid French bankers soon.

Mon, 10/19/2015 - 12:38 | 6685397 Meat Hammer
Meat Hammer's picture

And the contrarians who bought homes when the herd was running away from real estate in 2009/2010 and who see another, even worse, housing bubble being blown and are preparing their exits will be lauging all the way to the bank this time around (as long they get out in time).

Mon, 10/19/2015 - 17:01 | 6686674 buzzkillb
buzzkillb's picture

In that situation now. When we bought it was all cash bidding wars on everything in Los Angeles County under $400k. All the liquid people were waiting to pounce back in 2010. They then flipped the house becasue no one wants to go through rennovations or can take that extra loan out. So these people made a killing for a few years. This eventually priced just about everyone out. While this was going on rent was generally higher than buying (I am including taxes and insurance on this). Just up the street someone bought the house, did minor fixes and rented out for about $800 more than what they paid including taxes. $1500 mortgage getting $2300 in rent. The whole thing is crazy.

I am hearing from family friends that they are selling now and renting to miss the next downturn.

Mon, 10/19/2015 - 12:38 | 6685398 To Hell In A Ha...
To Hell In A Handbasket's picture

What's that famous American saying? I remember now, it goes........ "There's a sucker born every minute"

Mon, 10/19/2015 - 12:40 | 6685404 MadVladtheconquerer
MadVladtheconquerer's picture

I'm sitting in a back room waiting for the big boom:

https://www.youtube.com/watch?v=6ES3iNPcPL8

Forty-seven dead beats living in the back street
North east west south all in the same house
Sitting in a back room waiting for the big boom
I'm in a bedroom waiting for my baby

CHORUS:
She's so mean but I don't care
I love her eyes and her wild wild hair
Dance to the beat that we love best
Heading for the nineties
Living in the wild wild west
The wild wild west

Mandy's in the backroom handing out Valium
Sheriff's on the airwaves talking to the D.J.'s
Forty-seven heartbeats beating like a drum
Got to live it up live it up
Ronnie's got a new gun

 

Mon, 10/19/2015 - 12:42 | 6685420 10mm
10mm's picture

Mellennials should stay in the basements of their parents home's. Knowing the shit system for what it is,I would. 

Mon, 10/19/2015 - 12:46 | 6685437 buzzsaw99
buzzsaw99's picture

people are mostly out of their ARMs http://www.sandiegohousingsolutions.com/assets/images/next_wave_mortgage... yet foreclosure activity is creeping up. nearly a million http://rismedia.com/wp-content/uploads/2015/06/Foreclosure_Activity_char... in some state of delinquency in the usa. not a good sign because it means that people are losing their grip even with low fixed rates and every device D.C. can muster. also the shadow inventory on the banks rotten books is not counted.

Mon, 10/19/2015 - 12:46 | 6685442 Angelo Misterioso
Angelo Misterioso's picture

one which would enable "eligible borrowers" and focusing on millennials, to finance a house with a "down payment of as little as three percent."

 

the "eligible" will be the rare sliver of Millenials with OK FICO scores - the banksters need to make sure they don't reach escape velocity so they will get them to overextend themselves on a new "riskfree" house as the economy rolls over and dies.  Their skin in the game is not the 3% but the clean FICO that keeps the banks out of their lives - they should not trade that for anything....the bankers need to ensnare the next wave of kids....the govt condones it because an endebted population is subservient....

 

 

Mon, 10/19/2015 - 14:01 | 6685821 NotApplicable
NotApplicable's picture

You seem to have missed the news about what a FICO score will reflect, as it too has been redefined.

http://www.zerohedge.com/news/2014-08-08/housing-recovery-fizzles-new-sc...

Mon, 10/19/2015 - 12:47 | 6685448 Meat Hammer
Meat Hammer's picture

"3% down!?!?  Too bad I spent all my money on skinny jeans, thick-framed glasses, beard conditioner, and Che Guevara t-shirts!"

 

Signed,

Douchebag Millennial

Mon, 10/19/2015 - 12:53 | 6685482 buzzsaw99
buzzsaw99's picture

skinny jeans? lol

crAAPL devices and gaming crap more likely

Mon, 10/19/2015 - 13:51 | 6685775 SillySalesmanQu...
SillySalesmanQuestion's picture

Tattoos and tequila...

Mon, 10/19/2015 - 12:55 | 6685496 Dogspurt
Dogspurt's picture

What could possibly go wrong?

Mon, 10/19/2015 - 12:59 | 6685510 Shadow1275
Shadow1275's picture

Millennials deserve to be screwed. The point of life is to make things better for the next generation, but when the next generation ignores history and economics and votes for a party that continues to bail out Fannie Mae and Freddie Mac and then complains about corrupt government and Citizens United.

 

They won't learn until they feel the pain. Meanwhile being a Millennial myself I will grab a glass of Bourbon, sit down on my porch, and laugh as we all slowly spend ourselves into oblivion.

Mon, 10/19/2015 - 13:10 | 6685565 MadVladtheconquerer
MadVladtheconquerer's picture

Just as long as the pension and soc sec checks are in the mailbox by the first of the month!

And they had better clear! :)

"Cat had puppies?  Fuck you.  Pay me!"

"Police raided your joint?  Fuck you.  pay me!" (Ray Liotta in "Good Fellas" 1990)

Mon, 10/19/2015 - 14:21 | 6685913 Hongcha
Hongcha's picture

Millenial; you owe it to yourself to enjoy some fragrant hash oil with that Kentucky bourbon you're sippin' ... one of the very few good things trending in the U.S. right now ... artisan distilleries being another.

Mon, 10/19/2015 - 13:10 | 6685563 yellowsub
yellowsub's picture

They'll need to roll in the closing costs for this to be effective.

Mon, 10/19/2015 - 13:10 | 6685567 Teh Finn
Teh Finn's picture

And not one dime in savings...This too will end in tears.

Mon, 10/19/2015 - 13:12 | 6685573 Allen_H
Allen_H's picture

Looong basements.

Mon, 10/19/2015 - 13:14 | 6685589 RabbitChow
RabbitChow's picture

I fronted the money for my daughter to by a house.  She can afford the payments, BUT -- the amount of money to put down was only about 2k on a 230k house.  Three percent, lesseee now, that's 7k on a 230k house.  Nowhere near that much.  

 

the true cost to own a house does not consist of how much money you're willing to put up (earnest money deposit) but rather what is due at settlement.  The settlement costs, even if some are covered by the seller, easily amount to more than 10k, probably more on a  much more expensive house.  

This is someone who earns about 50k a year but as we all know everyone has expenses.  Saving money right now is not worthwhile, because I think they all know that inflation destroys any attempts at savings.  So why save, unless you can put that amount of money aside (10k+) in less than a year.  If you can, chances are you won't be positng here.  It might surprise people to see how much money they've been able to save early in their career vs. later.  The biggest amounts are aleways later in life.

Mon, 10/19/2015 - 13:32 | 6685685 madcows
madcows's picture

I'd say the REAL cost of owning a home is the maintenance.  Expect your payments to be double.  New roofs.  replacing plumbing, or fascia, or doors and windows or lord help you a kitchen or a bathroom.

The cost of maintaining a house is ridiculous.  A down payment is a fraction of the cost of a stinking kitchen.

Mon, 10/19/2015 - 13:14 | 6685594 JerrySpringer B...
JerrySpringer B All Over This Shiznit's picture

Fool me once shame on you but...

Mon, 10/19/2015 - 13:18 | 6685610 LetsGetPhysical
LetsGetPhysical's picture

Yes, yes... Buy an overpriced house at the top of the market with almost nothing down and shakey job prospects. I mean, what could go wrong? These are potential Bernie voters who will want debt forgiveness. 

Mon, 10/19/2015 - 13:24 | 6685632 E.F. Mutton
E.F. Mutton's picture

My name it is Pancho, I want to buy Rancho, but I got no pesos to put down

So I called Obama, he said "No problema" now me and my keeds own this town

Mon, 10/19/2015 - 13:29 | 6685666 madcows
madcows's picture

Hopefully the kids have learned that shackling themselves to 20 years of lousy debt is a bad idea, and they're better off telling the banks and builders to kindly go F themselves.

Then, move back in with mom and dad and pay off that debt while waiting for the housing collapse to kick in.  the real housing collapse.  not that 3% drop we experienced back in 08.  The one that brings houses back to half their current cost.

F the banks, you millenials.

Mon, 10/19/2015 - 13:49 | 6685769 rejected
rejected's picture

20 years? More like 40.

Mon, 10/19/2015 - 13:41 | 6685741 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

Just another bad fucking idea.  Despite those that espouse the attractiveness of low interest rates to the borrower, they never mention the fact that the uhmm principal has to be paid back as well.  Simply concept - the more you borrow, the more you have to repay plus interest.  Learn it, know it, live it.....

Mon, 10/19/2015 - 14:11 | 6685861 Grandad Grumps
Grandad Grumps's picture

When my son was buying his first place, it surprised me how FEEs had absolutely skyrocketed since the last time I had a mortgage. They are like 5X what I remembered them.

So, how much in addition to the cost of the house does the 3% down loan cost? Do you put 3% down and the banks get an additional 3% off the top in fees? That won't solve anything.

Mon, 10/19/2015 - 14:15 | 6685889 Hongcha
Hongcha's picture

As an owner of multiple RRE properties, this is music to my ears.  I can't help how insane thing get. I just don't want the bottom to fall out before I offload.  And here FRE comes to help me.  Really a beautiful thing.

Mon, 10/19/2015 - 14:20 | 6685911 Give up. Realit...
Give up. Reality is not scientific nor even mathematical.'s picture

Through Fannie Mae, Freddie Mac, HUD, and the VA the FED has jacked the price of housing up absurdly high with ZIRP.  And with the incredibly rapacious property taxes everyone sees today, well, let me just say, I'm glad I sold my fifty acre farmette in 2005 and that I am now a renter of a small, cozy, private, one-bedroom apartment.  I sold to a guy with cash, because the banks would NOT finance my property.  That's the truth about the real estate marketplace.

I keep tabs on my old place.  The property taxes on my old place have more than tripled since 2005, in just ten years.  They'll triple again too, in that short span of time.

I know property taxes are much higher in many areas, but you people who pay those exhorbitant property taxes for common core schools, lazy road crews, and these militarized police departments, are just plain stupid.  Prison inmates should be made to maintain the roadways like in the old days.  Put the whip to their hides, and don't spare it either!

All our U.S. banks are insolvent  They have plenty of foreclosure properties for sale though.  So, the banks don't even consider financing anything but the foreclosed properties they already own.  That means flippers and homeowners alike are looking for that rare cash-buyer, and a buyer that isn't going to be swayed by the properties that the banks are offering at higher prices, with as little as 3% down -to the ubiquitous millenial sucker...

Stupid is as stupid does, and that's generally incurable.  If you are getting financing on a house the bank owns, you're paying way too much for it.  The realtors love them.  They love them (the banks and bank foreclosures) because they keep selling the same foreclosed properties over and over again.  So, the moral is, if you want to end up a foreclosure victim, do something with the banks.

But don't come crying to me about how you've been victimized.

 

Mon, 10/19/2015 - 14:43 | 6686028 semperfi
semperfi's picture

Since debt is an asset, and millenials have lots of student loan assets (debt), can't they just use their student loans for the downpayment ?

Mon, 10/19/2015 - 14:54 | 6686072 steveharless
steveharless's picture

As a realtor In Las Vegas; Recently I 've noticed the banks have made it almost next to impossible to get a loan on homes.

www.ViewLasVegasRealEstate.com

Mon, 10/19/2015 - 14:56 | 6686080 roisaber
roisaber's picture

Eat the shit directly out of my ass, banker filth. I wouldn't buy one of the $600,000 fix-er-upper beach shacks out here if you paid me for it, and I mean that quite literally (there'd have to be a catch in it somewhere, right?)

Mon, 10/19/2015 - 15:36 | 6686262 Skiprrrdog
Skiprrrdog's picture

Why do they call them millenials anyhow? Is it because the very smartest one would have to live a thousand years to be half as smart as the dumbest baby boomer?

Mon, 10/19/2015 - 16:03 | 6686410 silverer
silverer's picture

They call them millenials because they will be in debt for millenia.

Mon, 10/19/2015 - 16:01 | 6686407 silverer
silverer's picture

Yo! Thanks govna!  Just as soon as I pay off my college loan!

Mon, 10/19/2015 - 16:26 | 6686527 all-priced-in
all-priced-in's picture

3% down doesn't even cover the fees that will be charged to do the deal.

 

3% down really means the amount financed is greater than the value of the house.

 

 

 

 

Mon, 10/19/2015 - 16:31 | 6686547 Obamamerica
Obamamerica's picture

Everything is just so fucking depressing

Mon, 10/19/2015 - 16:41 | 6686588 Obamamerica
Obamamerica's picture

For shits and giggles I went and looked for an upgraded used car last week. They actually offered me a 96 month loan on a 10K used car. Besides being incredibly insulted at the idiotic suggestion of a 8 year loan on a used car, I was saddened that this is the state of the county. 

 

 

Mon, 10/19/2015 - 16:42 | 6686595 astoriajoe
astoriajoe's picture

Nice storm clouds in the lennar image, by the way. 

Mon, 10/19/2015 - 18:32 | 6687077 KashNCarry
KashNCarry's picture

I know I must be from a different generation cause I'm spending all my disposable income on guns, ammo, pm's and booze... F-1 loan products forever!

Do NOT follow this link or you will be banned from the site!