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Introducing Fannie Mae's Instant Underwater Mortgage - 3% Down, No Cash Needed
Submitted by Anthony Sanders via Confounded Interest blog,
Fannie Mae, the Washington DC mortgage giant, has announced their latest program: HomeReady. According to Fannie Mae,
"HomeReady is designed for creditworthy, low- to moderate-income borrowers, with expanded eligibility for financing homes in designated low-income, minority, and disaster-impacted communities. HomeReady lets you lend with confidence while expanding access to credit and supporting sustainable homeownership.”
The confidence part sounds like a Viagra or Cialis commercial.
Of course the lender should feel safe — taxpayers are backing these risky mortgages … again.
Bear in mind that with only 3% downpayment, the borrower is instantly underwater and could suffer a 6% Realtor fee to sell the dwelling. Instant underwater mortgage!
The good news is that only 17% of mortgages in the US remain underwater according to Zillow.
And thanks in part to the Federal Reserve’s zero-interest rate policies, home prices have exploded since 2012, even though mortgage purchase applications have declined along with average wage growth.
With home prices rising faster than wage growth (or family income), we have a classic bubble. But with rents rising as well, we have an unaffordability problem as well. Clearly, making 0-3% downpayment loans help to solve the unaffordability problem, but also increases the risk of default. Particularly if interest rates rise and house prices tumble.
Remember, The Case-Shiler 20 City Home price index is growing at over 2x income growth.
Low downpayment lending is always a risky proposition, particularly if home prices tumble … again and wages continues to remain stalled.
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Shut up and take my money!
FREE GUBMINT STUFF FOR EVERYBODY!!!!!
(Don't worry about what you'll have to pay in the future becasue of this...)
Man, for a split second there I almost thought that said "Instant Underwear mortgage", and ya know? I think I might have believed it if it had said that. Because, yeah...I think we're almost about to that fucking point where we're going to have to mortgage our fucking underwear sometime real soon, bitchez! ;-)
Low down and No down mortgages coming to you backstopped with a taxpayer guarantee. It must be time for shit show round II. I sure am glad we dont have to worry about the too big to fail banks anymore beacause they are all so much smaller now...Serioulsy....who in fuck comes up with these ideas?
debt. must. expand. forever.
or it all comes crashing down.
+1000 viahj
after the student loans and auto loans default.. whats next i wonder. When will people finally say i don;t want any more loans and crash this shitshow
Put me down for 10.
FREE GUBMINT STUFF FOR EVERYBODY!!!!!
(Don't worry about what you'll have to pay in the future becasue of this...)
You will pay nothing, the future is war.
We lent money to some folks!
" I tell you this, and I tell you plain : what you have done before, you will do again ."
The Neurotic's Notebook 1960
Say, Ya'll. I live Somewhere in East Texas. I have electrical experience and some carpentry !!!!! Get with me and lets get afew houses while the gettins good !!!!!!!!!!!!!!!!!!!1
Wyoming is in the clear!!!
Time to move!
that's kinda funny...except hardly anybody even lives there. I think the gub-ment is trying to pull another one of those Devil's Tower stunts (as in Close Encounters of the 3rd Kind) by hyping up that Yellowstone could explode any day just to try and scare everyone away. There must be a ton of gold and oil to steal out from under Wyoming. Not to mention their secret alien bases and the underground gub-ment military bases. They already own about 50% of Wyoming...I think they want it all.
They're running out of firewood to keep the market warm. Time to start burning the furniture.
Obama Mae
These new home owners will be holding these properties for the banks... so that banks can keep them off the books
You know someone is full of shit. Markets up interest rates down and gold and silver going down. Does anything make any sence???? BULLSHIT I SAY
This is called the Homes For Fucking Mexicans program.
Even if I put 20% down I fully expect to be underwater in five years in the area I live. Hell even 50% down would probably put me underwater.
Why waste cash.
Sign me up for the 3% down Mortgage. The city I am looking at is already 30% hispanic. In fact all the surrounding towns will probably have whites as a minority by 2020.
Would I qualify for a minority loan if there aren't any white people left?
We are the singing dacing crap of the world
No.
Because minority status is about the status part, not the minority part.
Mexicans, at least, work.
This is for people on beneys. The scooters at Walmart crowd.
Just wait for the expanded Homes for Fucking Migrant Jihadists Program.
Werent they bailed out 8 years ago four years ago for doing this same sheeit? unreal
Homeowners don't simply load moving trucks in the night and depart their tax districts for greener pastures the way renters can.
Hey those mortgages are too EXPENSIVE. Just wait for NIRP. You'll get paid to buy a house.
"designated low-income, minority, and disaster-impacted communities"
Is there a list of those communities?
Look up Democrat strongholds..and you will find them
If you have to ask, you're probably not designated.
it's time for everyone to review the basics of fractional reserve debt-money creation.
This can never not happen with such a system.
But sooner or later, you run out of other people's credit.
Obama is filling up all the vacant and foreclosed homes in places no one with 10% or 20% down would venture. My brother told me Detroit is filling up vacant homes using Obama’s 3% loan program. This is how Obama pays back Wall Street by taking junk foreclosed homes off their books.
As goes Detroit so goes the rest of the country.
Bankrupted like Chicago.
Never ending financial shell game.
Im Italian a minority give me my shit now. Being responsible sucks ass
with expanded eligibility for financing homes in designated low-income, minority, and disaster-impacted communities
They meant to say, "guarenteed acceptance for low-income, minority, and disaster-impacted communities". Just like Billy's bubble, just bigger. I feel like I'm trapped in Groundhog's Day except the days keep changing, but the dance stays they same.
Assholes, just send out the fucken checks already for Christ sakes...no one wants your 30 year mortgaged shitty built tinder boxes.
So the FHA desk will be right to the refugee welcome desk as the middle easterners get off the plane.
Sign up for welfare, EBT, medicaid, free education, free cell phone, and Obama's own a house program.
Looks like maybe time to go all in RE?
We're back! Housing bubble 2.0.
Another pitiful social experiment in spreading around the wealth where the debts will be pushed onto our enourmou debt load. Only morons or Democrats or donkeys could dream this up having failed several times.
Strong the Red/Blue delusion is with you, hmmmm?
At first I thought it said -3% down payment.
I was like, "Hellz yeah!! Sign me up.....for an even dozen mortgages."
1. collect underwear.
2. mortgage.
3. profit.
I just realized how much awesome free shit I could have if I didn't give a crap about anything, anyone and just threw my self-respect out the window.
bullshit. these 3% loans have been around awhile. they have an onerous scam filled mortgage insurance policy attached to them that raises the apr over a full point. you have to be stupid to buy a house like this but when they get cheaper than renting they will sell like iphones.
I hate to disagree but you guys just aren't with the program.
3% down in this market is perfectly acceptable. It matters not whether the appraised value goes up or down. What matters is that shrewd occupiers can get into an overpriced property in this market, make a couple of payments, then ride payment/rent/tax free for a year or two at which time the Mortgagee can go ahead and bundle the paper up at book + with a pile of other turds and sell it back and forth to themselves making a commission on every move; then when they get tired they dump it on the government. This is the modern way to do business.
It has been going on strong for 10 years and the American people's asshole has been pounded so much that it's stretched as big as the Chunnel... and they seem to love it.
So what's the problem?
Discounted mortgages available in SHIT markets where no one will invest.
Why not add the "Fab" Tourre to bundle and sell the SHIT to dumbass Frenchmen and complete this remake of a disaster?
1.) With the help of the Federal Reserve home ownership is juiced.
2.) Get a FHA loan with 0% down.
3.) Stop paying
4.) Live mortgage free for 2 years
5.) Mortgages start defaulting.
6.) Mortgage crisis
7.) Taxpayer bailouts
8.) Repeat #1.
Repeat until the Federal Reserve is no longer a viable institution.
And the Democunts can say " Vote for us " see we're the party of the people...free shit for everyone!
3% down?
I'll take a dozen!
i lost my job 2 weeks ago, where my free shit??? nowhere, cuz i white middle class trash. mostly just white
This is just an expansion of a previous FNMA program where you could buy a FNMA repo for "3% down" although the down payment could have came from anyone, not just the buyer. FHA has already worked like this for years, though no telling from that product matainence what the MI will be on this program. HomePossible didn't have MI if memory serves.
Besides, this isn't even the best deal in town. My wife and I bought our house using a "consumer advocate" non-profit. They were a complete bitch to work with since they were incompentent (which is par for the course in mortgages anyway) and way understaffed (also normal). Our results can't be beat though: $215,000 home, 100% financing, interest rate of 1.5% (which we obtained by having the seller pay points to buy down), and no closing costs. All told? ~$1,000 a/month PITI when we could have afforded twice that much.
that program is in many cities by the way... naca.com
I would warn you though, working with them is not for the faint of heart, they suck almost as bad as Chase or BOA in execution. I had to underwrite the loan myself to get it through since their underwriter didn't know their own guidelines.
If you can barely scrape together the 3% down w/o the closing costs you're a true American!
Looking at the document it's ridiculously insane to see mortgage and low-income in the same paragraph...
Why dey put a picture of 2 white ladies under water? White peeps eligible dis tine?
This whole issue is the allegory par excellence of the Western world.
My point below is limited to Singapore but you get the idea.....
So the Fed, in the USA, has dropped rates to zero in the vain attempt to rescue its owners' balance sheets from marking to market their real estate mortgage holdings by inflating ANOTHER real estate bubble.
And the Fed Gov, by virtue of Fanny Mae and Freddie Mac, and the programs described above are not only standing by and watching this BUT ARE ACTIVELY ENCOURAGING IT!!!
The Fedgov via the central bank and its mortgage arm(where in the constitution is the federal government granted the powers to have a corporation to back stop mortgages?...I know, I know, its right after the section on abortion rights and gay marriage...silly me...) Fannie Mae and Freddie Mac are BLATANTLY using the American people as fodder to blow up another real estate bubble...and they're not even hiding that fact.
Three years ago when property got too hot in Singapore, the government did the following:
1. Introduced new lending standards via the MAS (monetary authority of Singapore) such that the banks looked at your tax statement and evaluated your monthly income, current obligations and built a ratio based on same to see if you could afford another mortgage, if you failed the ratio, you got no mortgage,
2. They introduced new stamp duties for second and third properties. Normal stamp duty for property conveyance is 3%. For your second property, its now 10%, for your third and beyond its now 13%. As one on the side looking to get more property, that stamp duty issue really cools your jets, let me tell you. You want to pick up a 1.8Mill apartment and you have to hand over 200K to the government... yah, ok, maybe government bonds instead.
3. All low-down payment programs by developers have been banned by MAS. You need to put down 20% PERIOD! No negotiation, no questions asked, that's it. 20% down minimum.
4. If you put 50% down, then item 1 does not apply.
So in Singapore the MAS and the government are actually concerned that there is a bubble and that when it pops people will get caught holding the bag so they are actively putting policies in place to prevent people of marginal means getting burnt by that which everyone knows is inevitable.
In the USA, Canada, UK, Australia....the governments and the central banks are actively ENCOURAGING people to participate in the bubble.
And Congress just stands by and watches this.
If that is not immoral, what is?
Squid
WAY off topic but.......when I up or down vote a comment, the cursor jumps back to the very top of the article then I have to scroll down and try to find where I was reading. Is there a setting to fix this? Thanks to anyone in advance for the help.