It can help reset house prices when the stop paying. I can pick up some cheap real estate :-)
Didn’t we already play this game a few years back?
That way you can avoid PMI.
At least that's what the scumbags did before the collapse in 2008.
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.
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As a retired mortgage banker, I can tell you the government will make these lenders whole if need be.
They’ll all be underwater within a year if not sooner.
How long until we have NINJA loans for illegal immigrants with no jobs? NINJA = No Income, No Job or Assets.
NOBODY and I mean NOBODY will be buying that CDO/Debt.
This will be a short lived program.
Very short.
So, people more likely to be able to pay off a loan are offered no relief.
Aimed at illegals. Cheered by the left as the American way! In a few years feds will sue the banks saying they engaged in predatory lending.
Big banks left the wholesale mortgage business in 2009, leaving it to companies like United Wholesale and Rocket Mortgage. They have a network of brokers out in the USA, bringing home-buyers/customers in. They package the loans, and then sell them off.
A sign of zero-down mortgages means, once again, some investors are getting greedy for higher yields offered by these “zero-down” loans, which are typically made to the worst credit risk home buyers. There also is a Gov’t incentive angle, with Gov’t encouraging loans in “underserved” areas (yes, once again)
its a sign the top is closes
“ Poor underwriting practices were a key driver of the subprime-mortgage crisis in the U.S., the International Monetary Fund wrote in 2008. ”
No, that would be credit default swaps and fraudulently listing crap mortgages listed as grade A because they were bundled. But the old fable remains that it was caused by low quality people taking loans.
The effect of that is to pretend that the banks and insuring agencies were scammed by these low rent ghetto people, and not vice versa.
In some areas PITI would be far less than rent, ensuring some stability.
But if a major repair is needed before equity is attained, mortgagors are likely to walk away.
If enough walk away, an area can become destabilized. Think Detroit! Think!
I live in Middle Tennessee and I’ve seen a new subdivision being built nearby that advertises they can get you into a new house for $100, I assume that is down payment, I maybe wrong but I wouldn’t doubt it.
Cloward-Piven in full effect.
Thanks Boomers.
My understanding is that they are making these types of loans available to the “newcomers”.
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.