Posted on 05/29/2024 9:06:16 AM PDT by Kaiser8408a
From Mike Shedlock (Mish).
It’s a perfect time to do something really stupid, like offering zero percent down payments on mortgages.
Case-Shiller national and 10-city indexes via St. Louis Fed, OER, CPI, and Rent from the BLS Perfectly Stupid Timing
Morningstar reports One of the Biggest U.S. Lenders is Offering 0%-Down-Payment Mortgages for First-Time Home Buyers.
Home buyers will be able to buy a home without putting any money down under a new program launched by United Wholesale Mortgage, one of the largest U.S. mortgage lenders.
The Pontiac, Mich.-based company’s new program will be available to first-time home buyers and people earning at or below 80% of an area’s median income, the company said in a press release.
UWM (UWMC) will give eligible buyers a second-lien loan of up to $15,000, in the form of down-payment assistance, for 3% of the home’s purchase price. The loan will not accrue interest or require a monthly payment.
“Homeownership is something we’re very passionate about,” Melinda Wilner, chief operating officer at UWM, told MarketWatch.
The company had previously allowed buyers to put down as little as 1% on their homes, but it wanted to go further to help home buyers, she said. The lender is anticipating a higher volume of borrowers with its new zero-down program, Wilner added.
Poor underwriting practices were a key driver of the subprime-mortgage crisis in the U.S., the International Monetary Fund wrote in 2008. But unlike the low- and no-down-payment loans that proliferated during that time – when lenders made loans to people who eventually were unable to pay them and lost their homes – UWM’s program is different, Wilner said.
My own personal comments: Will UWM be retaining these loans on their balanace sheet? Or simply resellling them to Fannie Mae, Freddie Mac? Likely the latter.
(Excerpt) Read more at confoundedinterest.net ...
Cloward-Piven in full effect.
Thanks Boomers.
My understanding is that they are making these types of loans available to the “newcomers”.
Assuming you can even get them to leave.
Next up the no interest loan.
There has got to be some kind of bidet underwriting of these loans. No way they could be sold otherwise. In 08 the CDOs had grouped loans by credit worthiness, with most of those being a sham because there was no equity once dead beats were given guaranteed mortgages. Defaults abound and no one went to jail.
They’re there to keep the yard mowed and keep the place up.
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