Got A Hundred Bucks? Buy A Home (Or Virtually Anything Else) Using 2,000x Non Recourse Leverage
Today's adjustment to the government's HARP program to get anything with a pulse as close to the discount window as possible was not the only proposal to revive the moribund US housing market. According to a new proposal by HUD, beginning this month and continuing for a year, anyone with a just $100 will be allowed to buy a HUD-owned REO home. In essence: the new buyer is merely taking over the mortgage payments in a repeat of what happened in 1970s New York along the Central Park West corridor. Granted for now it is stricly limited to only... 28 states! But it gets better: "HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan." Said otherwise, a $100 downpayment gives one unlimited degrees of freedom how to spend non-recourse, massively levered capital, and courtesy of money's fungibility, to even fund, shhh, the occasional iPhone. "Matt Martin, CEO of Matt Martin Real Estate Management (MMREM), says this is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA’s 203k offering." Why of course it is: it will only take enterprising Americans a few weeks to realize that the latest HUD program is basically an EFSF in sheep's clothing, which provides US consumers with a Benjamin in their pocket, the ability to lever up by a factor of about two thousand (or more) and use the proceeds for pretty much anything (but make sure to call it "home repairs"). And when the HUD is stuck with hundreds of billions of non-performing, delinquent loans, what then? Why the same that will happen to the EFSF: another wholesale taxpayer funded bailout... of those who were tricky enough to figure out this latest subsidy of the global retailer base.
From DSNews:
HUD has approved a program aimed at putting foreclosed homes back into the hands of owner-occupant buyers.
In select states, from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home.
The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Standard FHA underwriting guidelines apply, and the sale must be for the full amount of the current list price.
The $100 down payment incentive program has been approved for two of HUD’s four national regions – the regions managed by the Denver Homeownership Center and the Atlanta Homeownership Center. HUD homes in the states listed, as well as the Caribbean are currently eligible for the program.
The states in which this scheme will work:
Denver Homeownership Center’s Jurisdiction:
Arkansas
Colorado
Iowa
Kansas
Louisiana
Missouri
Minnesota
Montana
Nebraska
New Mexico
North Dakota
Oklahoma
South Dakota
Texas
Wisconsin
Wyoming
Utah
Atlanta Homeownership Center’s Jurisdiction:
Alabama
Florida
Georgia
Kentucky
Illinois
Indiana
Mississippi
North Carolina
South Carolina
Tennessee
Caribbean
It goes on:
HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan.
Matt Martin, CEO of Matt Martin Real Estate Management (MMREM), says this is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA’s 203k offering.
MMREM is under contract with HUD to assist with disposition sales of its repossessed homes. MMREM handles properties throughout 16 states, or about a third of HUD’s REO portfolio.
With an FHA 203k loan, “buyers can find a property that needs some TLC, fix it up however they want to, and finance the whole thing for $100,” Martin explained.
“MMREM is excited to work with this recent initiative, in a way that it supports putting HUD homes back into the hands of homeowners,” Martin said.
For those who think there has to be a snag somewhere in the fine print, because "there is no such thing as a free home" well... no:
In addition to $100 down instead of FHA’s typical 3.5 percent down payment, HUD says it will also cover up to 3 percent of the closing costs in most cases.
And then they wonder where the source of all this inflationary pressure comes from...
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America is a wonderful place.
We never get anything like that here.
You know ... sometimes I really did wish I lived in the US just for the amount of fun I could have! Forget risk, Live Life to the Max :)
US is so way ahead of EU. No One can blow bubbles like US. US Rules.
Owning a house is a HUMAN RIGHT, and elected officials are responsible for providing people with the opportunity to buy a house. EVERYBODY should be able to own a house, not just a few rich elites. For those smart ass libertarians who disagree, I would like them to provide just ONE example of an item that everybody owns which is NOT provided by the government.
I own my children.
actually, i think the govt believes they own our children too. hence, the leveraging of our children's future earnings via the national debt
Dear Gentlemen,
http://www.youtube.com/watch?v=QkWS9PiXekE
Kind Regards,
No no, your children own themselves. Self ownership is the first axiom of private propertyism.
Well, my children own me.
Fuck off. I guess enough yell about bailout to Wall Street so they throw us bone. Meanwhile the savers are screwed again. This will keep the house prices too high, trap us into debt.
Gold.
At zero interest what will the monthly payments be? It's not the price of the house, it's all about the monthly payment.
$100 is 20% down in Detroilet. At least that city will be saved....
Yep. For just $100 you too can trade your freedom for debt slavery. Hurry...while stocks last!!
Man, you say some really weird shit.
He's try to be funny. Ha ha ha [yawn]
That would cause vast employment and growth.
Well, it sure as hell isn't FRNs, your life or any property.
Anybody?
Gold.
Good one, M$B.
You've overplayed your hand too many times, though. It was cute the first few times, but you've posted too many things that are so out of left field that the schtick is over. It's become annoying.
Just admit you're a Ron Paul supporting anarchist/libertarian who believes that gov't is just a mob that gets to control all the guns and get it over with. With your wit and intelligence, I'm sure you could provide actual insight and input into the discussion instead of just stirring shit.
I think MDB is providing a public service. It's useful to point out hypocrisy with sarcasm.
MDB is a master of the deadpan comic delivery
Owning a house is a HUMAN RIGHT, and elected officials are responsible for providing people with the opportunity to buy a house. EVERYBODY should be able to own a house, not just a few rich elites.
What a quaint observation. Unfortunately, you fail to realize that any home purchaser utilizing 100% non-recourse leverage "owns" NOTHING! They are nothing more than renters for all practical purposes, except they enjoy using OPM to create the illusion of wealth. 2,000x leverage only ensures that the taxpayer will be left holding the bag.
Gold.
If you buy one of these jewels, maybe you can hire your unemployed kids and/or in-laws that are hanging around the house as the "contractors" to make the "necessary improvements".
The $100 down payments should just about be the full prices of some of the HUD inventory in Detroit.
$100 might be a little on the high side Detroit Homes go for about a buck - no joke.
Then we must eliminate property taxes. Otherwise we have a HUMAN RIGHT that is taxed by local governments, and if you don't pay up your human right gets confiscated. Your human right gets auctioned off by the county and someone steps in and buys your human right at auction on the cheap.
And how about eminent domain where the local governmet can take away your human right to build a shopping mall.
Uh oh .. what to do .. MDB loves property taxes and eminent domain ... just the thought of them makes him touch himself .. and yet he just declared owning a home as a human right ... Ben help!!
Any government has to be funded. If not property taxes, then what will be taxed? We all know about death and taxes.
Tariffs and sales taxes are not unconstitutional or immoral. But to tax a man's labor or the product of that labor (property) is.
pods
Utill that goverment uses guns to enforce the funding. At that point LEO's are nothing more than thugs who take from others to put money into their pocket.
Sales taxes, tariffs or transaction fees do not require a person with gun.
Dick Cheney said Reagan proved that deficits don't matter. They don't need to tax. They can just borrow. Or print. It's the American Way.
In an intentional, perpetual, creeping monetary inflationist scheme, taxes are merely a curb on future price inflation, according to Melchior Palyi.
bake sales
700 $ chocolate chip cookies
10k apple pies..
fund that government
in no time..
What a fucking moron.
Excise taxes (sales taxes) are constitutional and morally proper. They are one-time taxes with no further tax obligation hence no ability to steal the property later on.
Property taxes are unconstitutional and morally disgusting. They're ongoing taxes allowing legalized theft of the property if not paid.
High taxes aren't the solution. Small government and low government spending is the solution.
Small government can live on sales taxes easily.
"For those smart ass libertarians who disagree, I would like them to provide just ONE example of an item that everybody owns which is NOT provided by the government."
Where are all these wonderful government factories churning out all the items you claim are provided by it?
Business must be booming in that monopolistic endeavor you love so much...are they hiring? If not, why not?
They're greedy aren't they? ;-)
That wonderful government factory is in Washington DC. It's called the Bureau of Engraving and Printing. You can trade their product for just about anything you might want. How cool is that?
They might be hiring too. I hear they're pretty busy.
Owning a house is a HUMAN RIGHT, and elected officials are responsible for providing people with the opportunity to buy a house. EVERYBODY should be able to own a house, not just a few rich elites.
LOL !! this ideotology is precisely what got us in this mess in the first place...... EVERYBODY should own a house ?? how about the ones who do NOT want, or simply cannot afford the responsibility that comes with ownership...
it is small napoleons like YOU who think of dictating how we all must live and what standards ought to apply to EVERYBODY who create these impossible scenarios upon which the politicos prey on the idiots so they can be elected by promising all these nirvanas that the Free $hit Army demands so much..... except that they can never deliver, since nirvana is just that.... an impossible dream
it is precisely the shit you spouse here that such and such is A MUST for EVERYBODY..... and when they cannot deliver as most of these promises are undeliverable..... yes, the shit hits the fan.... except that the shit in this instance is so large and stinky we will have to live with the idiocy for YEARS....... roflmao...... indeed we deserve the leaders we get, for it is precisely this idiocy of chicken in every pot mentality of entitlement that it is so damned easy to harvest by the pathological liars that politicians are..... they just need a few of your type to have the populi believe that this crap is actually possible and then have the gall to believe there will be NO consequences ...... geeeezuz h krist what bullshit
For those smart ass libertarians who disagree, I would like them to provide just ONE example of an item that everybody owns which is NOT provided by the government.
hmmm well, how about the FREEDOM of CHOICE to be far, far, far away from this ole US of A so when the shit really explodes one will be away from the madness.... as in... for now.... i am so glad i am not in NYC or in ANY other major city where the Free $hit Army members outnumber those who are not begging where the next meal is coming from.... and then comeback to pick up the pieces really cheap.... once these masses have been boiled and plucked for their idiotic usefulness......
as i said before.... fuck the free $hit army and their keynesian priests of doom revolting really..... i look forward to the hollocaust of the arseholes only then we may be able to be free from blood suckers entitled to get something for nothing.
For those smart ass libertarians who disagree, I would like them to provide just ONE example of an item that everybody owns which is NOT provided by the government.
You got me. Everything I own was purchased with government fiat currency. Therefore, since the government provided the currency, through the Federal Reserve, everything purchased with that currency was indirectly provided by the government.
BINGO, bitchez.
Barack? Is that you??
People, this IS MDB we're talking about here. Remember -- the living archetype for 'Troll'? He/she/it should be fully expected to say the most inane, inflaming things possible. No need to fall hook, line, and sinker for his bait.
It seems like they are willing to try anything but let the market do it's job. Let the failures fail, and the winners prosper. Enough of these stupid centrally planned boondoggles aimed at making people buy property nobody wants at the price the banks can live with. If you have no offers, your price is too high. Let the market price discovery happen now, instead of dragging this out for years.
And why would I want to take over someone's WAAAAY OVERPRICED payment? It doesn't work in car loans, it won't work for properties either.
Crack Houses bought by their occupants... None of those $100 HUD giveaways in my neighborhood.
What a Country! Just 30 years ago my brother Alexis and I were running from the Tanks together! Now, for a $100, we can party with cool Amerian chicks!
unfuckingbelievable
Completely believable, Hopey is buying votes...
Class warfare...anybody?
quick! loan me $100!
i want to try this out!
... and if you lend me that $100 ten times, I can borrow $2,000,000. And pay you back, obviously
In fact, I'll lend you half the borrowings, and then you can borrow $2,000,000,000 and pay me back. Or something.
You understand what you just typed out is completely possible and that we should all be throwing $100 in a pot together and buy Vegas.
Why go for a house when an entire bankrupt town is available. We'll rotate days where we get to be boss hog.
Now ain't that sum'tin...
HEY ROSCOE! CLETUS!!!
That would be just awesome - fuck the system with its own fucked up means.
I mean, think about that.... not even banks get this degree of leverage. So, unless the unlaw were to interfere, you really got a WMD here. Unfortunatelly, there will be intereference as soon as people would do smth like that.
You have to earn and save $100 to be eligible to be part of this windfall. Unfortunately 99% of people cant save the 100,
Waiver of $100 down payment:
Buyers of houses that are or will be the locus of employment for one or more single women shall receive a waiver of the $100 down payment, provided that the local HUD administrator has visited the house and certified that each single woman has demonstrated her ability for gainful employment.
FHA regulation 69A-subpart D2.4.
Prostitutes?
"Prostitutes" has a negative connotation. Better to say:"Ladies of the night", or "Liberators of Men", or "Stress Relievers", or "Sexual Healers", or...
I'll send you $100 in Barber Quarters and you can get 22 of them.
Villa de Slewie.
FUCK THIS.
Cmon man!
A benjamin gets you a home in the Caribbean! America, Fuck yeah!
/sarc
No worries, Mate.
They'll allocate 2 billion to this, 1.95 billion for administrative costs, and the rest..., you've heard of walking around money on election day?
The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan.
And so, the going rate to have your brother in laws construction company hang a new closet door just went to $50,000. Welcome to fraud central.
That closet just happens to have a door made of 0.9999 silver.
No, the invoice is for a $50,000 closet door, actually the door is free with that amount of wholesale drugs which you can sell out of your $500 Detroit house you are 'renovating'.
Phew! Just in time. Milk went from $1.98 a gallon to $2.98 a gallon and they said there was no inflation.
You think I could pay health insurance premiums with that loan? Those have gone up 15% a year for ten years.
This is just bubblelicious as it gets; I'd say it's bullish for appliance, car, and Viagra sales - bearish for anyone below generation X.
Because of food inflation I have had to modify my diet to eat the most abundant and least expensive food: bull shit.
eat ipads.
Just eat your peas.
Any guarantee on Granny's check?
The damn half and half costs more the stupid milk.
Let's just start providing free everything for everyone and just get it over with.
Swimming pools are a human right!!!
Some people never learn. There will be plenty of gullible sheep lining up to be financially slaughtered over time.
If these really are non recourse loans there is no downside risk
Fannie and Freddy....running the largest rent to own real estate business in the country.
Although paying full list price is probably a rip off. That is a very expensive put.
Yeah, the loans assumed are still probably front loaded with interest, so figure a schmuck pays 3 years of payments before defaulting. Bingo, more interest paid and zero equity built.
Just another way to let the sheep hang themselves. The houses sure are not going to appreciate, as the inevitable rise in interest will cause the value to plummet.
Think of it as a Dumber Man's Lottery.
pods
Only the dumber man actually falls for this. The smart man buys the property and takes out a huge 203K loan to 'renovate it - maybe he buys himself some gold or pays of his house note instead. Then he doesn't make the first payment and lets the house and 203K loan go into default.
Takeaway: free houses, PMs, or other goodies. Short the banks, buy CDSs (but don't get left holding the bag).
Do I about have that right?
dp
Get down to the corner and get a Pay Day "loan" to fund the down payment!
Sorry, what?
I want me... a free house.
It almost sounds too good to be true .... sign me up for ten .
So in two years we start to read all the stories of mismanagment and theft that occured with this program. BREAKING: Action news at 5... prosecutors and police file charges against greedy con men that took advantage of mortgage program to help the unemployed, homeless, (insert heart wrenching word here), people of our great country.
Are you sure this is legit? This sounds... like an april fools joke.
That was my first thought too!
And then I realised that was why it must be real - you couldn't make this shit up.
Remember, it's vote buying season.
line up everyone!
I am happy to announce that the Government is giving out free blowjobs...
they will be provided to you by the person standing to your right.
enjoy
I'd line up if the blowjob is administered by a ukranian nurse.
I don't think he's a nurse, but here's your Ukrainian:
http://02varvara.files.wordpress.com/2008/05/ukrainian-yushchenko-dioxin11dec04.jpg?w=409&h=330
I was expecting Gahdaffi's Ukranian nurse. That was mean.
umm, isnt that discrimination or something against women. bj entitlements dont benefit us
Naturally after this implodes people will line up in New York protesting the greedy bankers for misleading the poor sheep who are now even more stuck in debt than before with little to show for it.
Damn that free market and damn that capitalism.
Non recourse? Wtf?