H.R. 6694 would revise the requirements for seller-financed downpayments for mortgages for single-family housing insured by the Secretary of Housing and Urban Development under title II of the National Housing Act and to authorize risk-based insurance premiums for certain mortgagors under such mortgages.
Detailed Summary
FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 - (Sec. 2) Amends the National Housing Act to make exceptions to the prohibition against mortgage insurance for mortgages involving a downpayment using funds furnished by: (1) the seller or any party that benefits financially from the transaction (seller-financed downpayment); or (2) any third party that is reimbursed by the seller or any such party.
Makes eligible for mortgage insurance, in spite of a seller-financed downpayment, any mortagors with credit scores equivalent to a FICO score of: (1) 680 or more; (2) at least 620 but less than 680; or (3) 619 or less. Prescribes conditions for mortgage insurance in the latter two situations.
Requires entities participating in a governmental or private nonprofit program that provides downpayment assistance for such a mortgage to offer and make available, before loan closing, counseling about the responsibilities and financial management involved in homeownership.
Authorizes the Secretary of Housing and Urban Development to impose civil money penalties for improperly influencing appraisals.
(Sec. 3) Prohibits the Secretary from implementing: (1) risk-based premiums designed for mortgage lenders to offer a Federal Housing Administration (FHA)-insured product that provides a range of mortgage insurance premium pricing based upon a specified risk that the insurance contract represents; or (2) any other risk-based premium product for mortgage insurance on a single family residence where the premium price for such new product is based upon the borrower's Decision Credit Score.
Makes an exception from such prohibition for flexible risk-based premiums. Authorizes the Secretary to establish, for a mortgagor whose FICO credit score is under 600, a mortgage insurance premium structure with a variable rate that reflects the mortgagor's credit risk, if the basis for determining such rate is established before the mortgage is executed.
Requires notice to mortgagees and to Congress before such a premium structure is established or changed.
Requires the Secretary to consider specified factors when premiums are established and collected under a flexible risk-based premium structure.
Authorizes the Secretary to provide for variations in such rates according to the credit risk associated with the type of mortgage product that is being insured.
Requires the Secretary to make payment incentives to a mortgagor, in the form of certain refunds, upon payment in full of timely mortgage payments.
Authorizes the Secretary, for mortgages with a flexible risk-based premium, to establish a higher annual premium in lieu of a higher up-front premium.
Status of the Legislation
Latest Major Action: 10/2/2008: Placed on the Union Calendar, Calendar No. 582.
Points in Favor
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Points Against
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Visitor Comments
Erik
September 18, 2008, 5:31pm (report abuse)Chuck,
I RENT because I live in San Diego where real estate agents, corrupt appraisers, speculators, and poor people who lied on their Alt-A mortgages rose prices so high that no sane individual could afford a house. The only way to buy a house was to lie, get an adjustable rate mortgage, and wait for your home to appreciate magically and sell it to the next sucker. Too bad we ran out of suckers and now ever Real Estate Agent (we must have more than doubled during the bubble) is upset over lost business. I thought it was always a great time to buy?!
Chuck, I want these home buyers to actually PAY for their own home and not use sham corporations who funnel money from home builders to home buyers and still qualify for a government backed mortgage.
Down Payments are required for a VERY specific reason. Tons of research has shown that buyers without their own down payment are exponentially more likely to default. THAT IS A FACT.
John R
September 19, 2008, 10:35am (report abuse)Why not have a special FHA loan for certain buyers in which the down payment is 1% . Who needs Syphax sucking $500 off of every deal?
John R
September 19, 2008, 10:46am (report abuse)I am against DPA, BUT, I think now is not the time to make the change away from it. I advocate a change to the FHA loan whereby a buyer who needs it, can make a small (1%) downpayment and qualify. The down payment assistance program has always had the implied effect of equating to mortgage fraud. For example the wording in the contracts etc. is crafted to make it appear as if the seller is not really paying the downpayment for the buyer. Instead it is worded to give the appearance of a thirdd party contributing the downpayment. As usual when we try earnestly to deceive ourselves it is us who is deceived, and loses. Nehemiah has a vested interest in keeping this thing going because they receive $495. for every deal done. The buyer and seller are usually so confused by what is happening in the contract that there is room for many inequities to occur on the part of the lender and the savvy parties to the contract. Let's have a program without clandestine wording and trickery.
For DPA
September 19, 2008, 4:23pm (report abuse)It is amazing to me the people who still do not understand how DPA works and the benefits to all parties in the transaction. DPA organizations carry out many charitable acts in many communities across the country. First of all the sellers money does not go to the buyer. It is well documented that the money comes from the pool of funds the DPA has to gift. The seller makes the donation to replenish that fund so the charity doesn't have to seek government money (your tax money) to continue to help future buyers. The seller pays a fee. Where does that fee go? It creates jobs and tax revenues in the form of employment taxes. It allows the charity to continue charitable acts in other areas. Have some of the ELITE organizations abused their organizations status? Sure they have and that could happen anywhere. There are legitimate charities that operate in this fashion that are now going to be forced to layoff workers and discontinue their charitable work. What a shame. Support 6694!
John Nunez
September 19, 2008, 5:19pm (report abuse)I cannot believe they are still trying so hard to restrict poor people in America from owning a home. DPA is their only hope!! Keep it alive!!
Parker
September 19, 2008, 10:08pm (report abuse)As a loan officer for 11 years, I have used DPA for hundreds of clients. Not one of them have defaulted. I don't know where FHA is getting their numbers but they are not my numbers. DPA works and has helped hundreds of thousands of home buyers across America. If you kill DPA you will just put another nail in the coffin of the US economy. You really don't need that right now.
Erik
September 20, 2008, 2:58pm (report abuse)The DPA scumbags are still coming out in force. How could Parker possibly know about hundreds of clients? Does he call them up once a month to verify their mortgages? I HIGHLY doubt it. More sensationalism. And John Nunez, he probably works for AmeriDream. How did people buy a home before AmeriDream! We must have all been living in tent cities! What ever will we do!
manny m
September 21, 2008, 3:05pm (report abuse)Lucky us, the same people that are putting their support behind DPA on capital hill are the same scumbags that are trying to put a provision in this 700 billion dollar bailout to hand out billions more to losers who bought with no money down and are now looking for a free ride. So, you morons can stop wasting your breath convincing each other and yourselves that DPA is beneficial to anybody but YOU! This week we were we were informed by the government exactly what it is going to cost us to cover all these people who can't save a dime but want everything now.
Bob
September 21, 2008, 8:12pm (report abuse)Erik, Please do something else besides berate everyone on this site! You are not going to convince anyone of any degree of sincerity that you claim to have on this subject. Get a job or take up a hobby; golf works really well for most of us and keeps you off the streets and the computer. In other words, say it once and get on with it; we're tired of hearing you're talk of "scumbags".
No Name
September 21, 2008, 10:57pm (report abuse)The DAP program is helping so many people in many ways. It helps people to purchase these homes of other people that are losing their homes and going forclosure. And by these people purchasing these homes, it helps the banks, mortgage companies and many other people involved in financing, to have a job, a home and not have to file unemployment as the percent of people buying homes drop. We really don't need any more sadness in America...we're going thru enough!
Dear Bob
September 22, 2008, 1:20am (report abuse)I nominate you to join the list of "scumbags" that Erik is referring to. I can guarantee that you have not fooled any knowledgable persons about why you people support HR 6694. The only reason you aren't getting more opposition is that most people don't even know what DPA is or that this piece of legislation to revive it even exists. Keep up the fight Erik.
Bob
September 22, 2008, 10:59am (report abuse)You think I don't know the stats on your business? I've pulled up tax records, lobbying payment records, capital raising statements, funding records, etc.
I know your business. I know how you operate, and I know the scum that the DPA business needs. The mere fact that you can justify the program knowing the default rate, knowing the cost to tax payers, and knowing how the DPA works means you are complicit with the fraud. I don't know how you can look at yourself at night.
DPA vs. Seller Assisted Gift
September 22, 2008, 11:05am (report abuse)Please watch your use of DPA. True DPAs receive funds from HUD. Seller Assisted Gift Programs receive theirs from the Seller. Gift programs have a very high foreclosure rate unlike the DPAs. Our DPA has a .2% foreclosure rate. Yes, .2%. True DPAs have income limits, first time HB, require property inspections and limit fees and interest rates. Seller Gift Programs are just a way to trick the system and get past underwriting guidlines that have served us well in the past!
Chuck
September 22, 2008, 11:25am (report abuse)This is supposed to be a site for comments, not a bunch of name calling and mud slinging...please people! For those interested, here is a very good description of HUD vs. DPA. Have a nice day, everyone and let's keep it civil!
http://activerain.com/blogsview/692021/Part-2-Down-Payment
Nothing Civil about DPA
September 22, 2008, 4:35pm (report abuse)There is nothing civil about asking us to okay a plan to continue risky lending practices. We are being made to choke on the debt incurred by allowing people to get into homes with no money down. By the way Chuck, didn't you start the name calling by labeling the rest of us "antogonists" and "hard asses". Keep up the good work Chuck, you may well yet get us to foot the bill again in order for you to get your commission checks.
Chuck
September 22, 2008, 5:54pm (report abuse)BIG difference between an antagonist and a scumbag there, whoever you are. If you will take time to check, the FHA handbook allows for non-profit organizations to provide DPA to qualified buyers. Are all DPA orgs "scumbags" or, just the ones that you see fit to lable as such? In case you have forgotten, or don't know, DPA also benefits the seller whose house is on the market an inordinate amount of time and who is willing to provide, THROUGH an FHA-approved non-profit, the necessary funds that a QUALIFIED buyer needs in order to purchase his/her home. I apologize if you took offense, in particular, by my use of the term "hardass"!
Martin
September 22, 2008, 6:03pm (report abuse)Maybe if we tightened credit for a change people could afford to save for their down payments and not borrow them.
Erik
September 22, 2008, 11:21pm (report abuse)Chuck, the fundamental problem is the word non-profit doesn't mean these DPA firms operate for free. Executives have million dollar pay checks. You want the facts? They are RIGHT HERE.
http://www.forbes.com/forbes/2008/0901/042.html
These are the facts; undeniable facts. Non-profit means nothing, it's merely a business designation. I could create a non-profit and make millions.
Lynn
September 23, 2008, 9:20am (report abuse)Everyone here makes great comments, but please also forward these comments on to your respective legislators. Email or write your Senators today. They need to hear this feedback!!! Don't preach to the choir. Let your legislators know how you feel before it's too late.
Mason
September 23, 2008, 2:47pm (report abuse)I've seen both the good and the bad of DPA. I even used to work for a DPA company. Lets look at this reaistically. Extremes are never a good thing. I can't believe that DPA is all good or all bad. This argument is much like the gun debate.
"Do guns kill people or do people kill people?"
Did seller assisted DPA do this to our economy? The answer is no.
I worked in 5 different states with hundreds of mortgage loan officers and realtors. I saw a lot of great agents and LO's that were able to help good people get into homes that they could afford. However I also a number of LO's and agents getting people into homes using 80/20's and ARM's and Interest-Only loans. Again these are only tools to be used. Banning DPA or certain loan programs wont stop unethical people from finding a way to push the envelope and get buyers into homes they can't afford. Don't take away personal accountability.
Certified Appraiser
September 24, 2008, 1:44pm (report abuse)DPA is perfect example why this nation is in the mess we're in. DPA is nothing more than legal money laundering for profit and provides a means for various parties to a transaction to skim equity from the transaction. It is also a fact these payments are often hidden from market participants (appraisers,lenders,etc) which inappropriately pumps up local property values and puts this nation's financials at risk. For example, Oregon realtor leaders have for 3 years now mislead their general membership into thinking its ok to hide true cash sale price from appraisers/lenders... even though all mortgage instruments are based on a national definition of "market value" requiring these concessions be deducted from total sale price (price should reflect "CASH PRICE" to seller). Instead of companies profiting off the backs of buyer/seller by allowing companies to make millions$$ off DPA programs- cut out the middleman and PASS A LAW allowing HUD to take direct seller contributions!
DPA vs Seller Assisted Gift
September 25, 2008, 11:56am (report abuse)Nice to check these posts and see good strong opinions. Seller Assisted Gift Programs have made things tough on real estate appraisers and for lenders (needing those same appraisals.) DPA (True DPAs) have an undeniable lower foreclosure rate than Seller Assisted Gifts or those that saved on their own. Remeber DPAs are not in danger - the Seller Assisted Gifts are. I really hope this gets read, because I would like someone to answer as to why we don't change seller contribution limits and we can stop all this nonsense about calling it a "gift." It become traceable and different than true DPA that provide assistance without increasing a sales price.
Jovan
September 26, 2008, 11:39am (report abuse)I have been reading some blogs regarding HR 6694 and where it sits today. It is the 11th hour and it still needs support from us to make it happen. Lets ensure that if the government is going to bail out Wall Street that it at least gives something back to Main Street. One congressman that needs a phone call is David Obey from Wisconsin. Let his office know that you want their support when HR6694 is introduced. 202-225-3365. Call them today! We dont have time to waste.
Anthony Paul
September 26, 2008, 11:40am (report abuse)DPA update Rep David Obey (WI)has the deciding pen on the future of DPA. DPA may be attached to Mainstreet Stimulous package. Rep Obey has final Pen. Call and gentley persuade him to KEEP SFDAP ALIVE!
Paul Stanley
September 26, 2008, 11:43am (report abuse)DPA has a new potential adversary: Congressman DAVID OBEY of Wisconsin. He is planning to STOP DPA. Please call him and voice your concern to support DPA. We cannot eliminate the only true STIMULUS PACKAGE we have that DOES NOT USE TAX PAYER DOLLARS!!!!!
Call NOW: 202-225-3365
Ernie Fontenot
September 26, 2008, 11:57am (report abuse)Bring back DPA! With a secure FHA with DPA, people can buy a home, and have a secure future. Congressman David Obey is against DPA. Call him today at 202-225-3365 and ask for Paul Carver.
Erik
September 26, 2008, 1:23pm (report abuse)Everyone call Congressman David Obey and support him against DPA!
His number is: 202-225-3365 ask for Paul Carver!
Gene Simmons
September 26, 2008, 4:08pm (report abuse)Obey's office says they have nothing to do with it
Ace Frehley
September 26, 2008, 4:09pm (report abuse)Pelosi's office is working on something to restart DPA
Jerry
September 28, 2008, 2:08pm (report abuse)Someone told me that 6694 was going to be added to the Continuing Resolution that was passed yesterday in the Senate?
Good Luck DPA, you'll need it
September 29, 2008, 1:01pm (report abuse)After listening to several days of congressional debate of the bailout bill, it is very clear that there is strong opposition to legislation like HR 6694 that perpetuate risky lending practices. I am very happy with the common sense and insight that congress has shown in recognizing that programs like DPA do not contribute to the health of the housing market or to our country's financial stability.
Edna
September 29, 2008, 5:19pm (report abuse)Reading these comments is evident why some of you are still renters and should remain so. It also is evident that you know nothing about qualifying for a loan. FHA loans or DPA's did not put our housing market in the state it is. FHA has strict guidelines of LTV's and documentation required. Stated Loans that were made to anyone who had a pulse and helocs given at a rate so low no one could refuse or how about the infamous pick a pay. Choose what amount you want to pay until the equity in your house runs out and prices fall and, you guesed it, foreclosure. This was all on homes with people who "had money invested in their homes." People who need the DPA can afford the payment, but they just do not have all the down or else want to upgrade their home. Taking away DPA is not our answer our another shovel digging our housing economies grave.
Jovan
September 30, 2008, 1:31pm (report abuse)DPA Reform makes sense because:
* losing DPA will cost the economy $150B in housing sales in next 12 months. Why infuse $300B + $700B and then lose $150B out the backdoor.
* it doesn't cost the taxpayers anything
* we have and will spend $1 Trillion on this housing crisis and I am not aware of any other program in either H.R. 3221 or the bailout that doesn't cost the taxpayers anything
* so if we can keep $150B in the economy at no cost to taxpayers and allow low-to-moderate income people to buy at today's low home prices, why wouldn't this be a part of the bailout solution package?
Main Street is asking "What's in it for us?" And Congress should make sure that working Americans see some direct benefit from this bill.
Contact Barney Frank at 202-225-5931, and Nancy Pelosi at 202-225-4965 today and tell them to include the DPA Reform H.R. 6694 language to the ‘Bail out Bill’ and give something back to Main Street.
To: Supporters of DPA
September 30, 2008, 5:20pm (report abuse)Do you supporters of DPA honestly believe that there is so much opposition to these programs because the rest of us are either misinformed or just want to keep the first time buyers in "our" rentals? Do all of you supporters honestly think that you can effectively argue that there is no downside to DPA? Are you kidding?? If you were really interested in helping out the less fortunate you would be fighting to get the economy on track in order to raise wages so that these people could afford a down payment. But no, you would rather risk continued mortgage defaults in order to keep sales moving. That you would even suggest to include DPA in this bailout is absolutely a slap in the face to all the responsible people that will ultimately pay for this mess. In the coming week, the Democrats are going to propose that we simply bail out irresponsible homeowners instead of fixing the underlying problem. We will be bailing out some of the very same people who got into these homes using DPA.
Certified Appraiser
September 30, 2008, 6:43pm (report abuse)"To the above writer of "Supporters of DPA"... I think you said it well, but our comments are falling on deaf ears. Almost every single supporter of DPA programs is in real estate commission sales and all they care about is their next paycheck, no matter how it affects the public.
Jovan
October 1, 2008, 5:47pm (report abuse)To the last two ANTI-DPA bloggers...Believe what you want on the defaults, but unless you did your own homework you dont understand that what you keep repeating about defaults. It was incorrect from the beginning. If the program was so terrible as HUD said then why is the CBO stating that it is a win-win for the economy? http://www.cbo.gov/search/sitesearch.cfm?criteria=H.R.6694 See for yourself. Why would you try to eliminate 150 billion in sales with DPA in the next 12 months when they economy is struggling? Think first then speak.
Christian
October 2, 2008, 10:57am (report abuse)My wife and I are very frugal, wise, and prudent with our finances, always have been. We have never been late on any payments in our life. To no fault of our own, we are the victims of others bad financial decisions. Credit and lending are tight. We have moved to Atlanta to buy and run our business, we have put all we have into the start up, and now we can't even buy a home due to down payment amounts required skyrocketing. DRA bill 6694 is the only way us honest folks can buy a home, we not only support it, and we desperately need it. Put better rules and filters in, and allow it to help those who qualify and need this help. This would be a great step up for the whole nation, and will help so many others that are affected by the credit wall. We are the people who you count on to FUEL the economy, and but we are rendered useless to ourselves and the economy. Free us, rally and vote to pass bill 6694.
RE: Christian
October 2, 2008, 2:19pm (report abuse)You are a perfect example of why of why I believe DPA is a horrible program. You are starting up a business that you sunk everything into. There is a very real possibility that your business could fail if the economy slips even further and you would have no reserves to make the mortgage payments. If you had put money into the home in the form of a down payment, then fine, the bank and the rest of us would have a chance to recoup when you default. The real problem is that, most likely, the seller is going to raise the price of the home and kick back the difference to you for the DPA. Therefore, the loan is for the original asking price, which the bank will not be able to recover when you default. If your business is viable, then why can't you wait for it to generate enough income to make a down payment on a home. Oh yeah, because our country has on overwhelming sense of self-entitlement and most people refuse to save a dime to buy anything. So agents, keep the hard luck stories coming.
To - Jovan
October 3, 2008, 10:44am (report abuse)I am not sure who you are trying to convince with your BS of how great DPS is for us and the economy, since you won't ever convince us and you don't have to convince your fellow agents and brokers. The only economy that DPA will have a positive effect on is your personal income and a short-term fix to your industry's bottom line. I have "thought" about and researched DPA before I "spoke", but any valid argument against DPA has and will simply fall on your and your colleague's deaf ears.
Todd Hillman
October 7, 2008, 5:04am (report abuse)When is Congress going to vote on this to help main street. Wall Street got what they wanted. We need this on the streets next to Wall Street.
Carl Mota
October 7, 2008, 11:58am (report abuse)Hopefully they will vote against this soon so we don't end up once again bailing out Wall Street and all the irresponsible people who don't put even one cent down on the properties.
Cody Brightman
October 7, 2008, 1:40pm (report abuse)This isn't going to be just a bailout for Wall Street. Congress is pushing for a bailout of Main Street as well. The only problem is that people who did the responsible thing, not buying homes they could not afford with nothing down, are going to pay to bailout their irresponsible neighbors on Main Street. As many irresponsible people there are waiting for their handout, there are many more responsible people that are going to unfairly have to give it to them. Being one of the responsible people, I say to hell with more handouts and programs like DPA that promote irresponsibilty.
RE: Christian
October 8, 2008, 4:56pm (report abuse)The sad truth is that most new businesses fail within the first year, even when the economy is good. Trying to start a business and buy a home with no downpayment or cash reserves is setting yourself up for failure on both endeavors. Get your business off the ground, then concentrate on buying a home. I wish you the best of luck with both!
Do not support DPA!
October 10, 2008, 6:28pm (report abuse)We are moving into very serious economic times here folks. People that don't have any money to put down on a home or anything saved to get them through tough times have no business buying a home. The fact is that everyone is now much more susceptible to job loss than anytime in recent history. Anyone who argues that resurrecting DPA would help get our economy on track is either uneducated or misinformed. The fact that we allowed the economy to ride on pure credit is what got us in this mess to begin with. That is exactly what DPA is, the ability to buy a home on pure credit.
vstil
October 23, 2008, 4:03pm (report abuse)who are the sellers, who have just lost 20% of the value of the home ... to finance the buyer ... pay buyer down, closing, and the other costs. Again this is socialist thought, "from each according to their ability, to each according to need". We have all witnessed the bankers and stock marketers are more needy than the rest of us .. who pay for their excesses.
VS
October 23, 2008, 4:05pm (report abuse)who are the sellers, who have just lost 20% of the value of the home ... to finance the buyer ... pay buyer down, closing, and the other costs. Again this is socialist thought, "from each according to their ability, to each according to need". We have all witnessed the bankers and stock marketers are more needy than the rest of us .. who pay for their excesses.
GW
October 23, 2008, 4:58pm (report abuse)All the people who are screaming about trying to prevent poor people from owning a home or the ones sayign they can afford the home but not the down payment are rediculous. You can't afford the home if you can't afford the down payment. Why do you people think we are in this mess? If people took more responsibility and saved money then bought something we would all be better off but th ementality is that home ownerhips is a right given to you just because you live in the USA. If you can't afford the down payment then you can't afford the need repairs, the property taxes that are going to go up, the furniture to put in the house, etc.
These programs are jsut ways to bend the system to get people who done want to wait and follow the system into a house. If you want to buy a house you need to set a monthly budget, spend less then you make, save for a down payment and then save some more for an emergency fund then buy a house. This process makes you vested in the house.
GW
October 23, 2008, 5:05pm (report abuse)Another comment often seen is that the govenment is bailing out Wall Street which is simply not true. They are buy stock in banks and assets to provide liquidity to the banks. When these assets increase in value, which will happen, the govenment will sell the assets to get the money back. This $700 billion package should make the tax payer money in the long run.
Try the citizen and I bet they wouldn't condier it a buy out. Say a home owner in in foreclosure and the govenment says they will by half their house so they can stay in it but when they sell they have to pay the govenment back plus half of any profit they make, or eat any loss if they sell before the market turns. I bet most people would not take this choice because they feel they have some right to share in teh profits but not the losses of the housing market.
mark
November 5, 2008, 2:46pm (report abuse)Hey J Johnson. Do you really think that someone that uses the DPA of only $9000 and defaults because they cannot make the payment would had been able to make the payment if they had actually made the DP themselves. $9000 would probably make the difference of 50 bucks at best. HR 6694 rewards those with good credit and a proven track of paying their bills....unlike the prior program. It cost you nothing!!!! Going through a divorce I know first hand how hard it is to save money when any extra goes to support my kids and my X. FHA defaults are because they lent money to those that had no business buying a home in the first place. 6694 is different!!!!!!! This is real life buddy....this is not asking for any of your money...just a way to help get into a home that I would pay TAXES on and purchase goods for the house.
RE: mark
November 5, 2008, 5:35pm (report abuse)Hell yes mark, I know for a fact that most people are much much more likely to NOT walk away from their obligations if they are at risk of losing their own hard earned money. Not only would a person think twice about losing the money, they would certainly give more consideration to affordability if they had to put their own money on the line. You speak of $9000 like its chump change, and guess what, it is if you didn't have to earn it. Agreed, this is real life and you should treat it as such.
Jim
November 13, 2008, 2:11am (report abuse)Real simple solution . . .
Congress amends HUD's statutory cash investment requirement for borrowers as follows:
"The 3% minimum investment is reduced to zero for buyers of foreclosed properties and those with less than 125% of the median income for their area. Buyers making less than the 3% investment will pay upfront and monthly MIP premiums of 150% of the amount charged to like buyers making a 3% or greater investment."
There . . . No flim-flam DPA machinations needed . . . the MI pool gets funded enough to handle the higher defaults . . . REO's get sold, low income buyers get access to homeownership, etc. etc.
RE:J Johnson
November 21, 2008, 10:21am (report abuse)So are you saying everything we buy we should put down 3% to 20% before we can buy and if we don't then I don't feel like I have ownership. I can go out and buy a car with 0 down...in fact I can buy a car for over msrp to cover negative equity. I pay my bills!!!!! Come on....if I thought $9000 was chump change why would I need DPA. My point was over the 30 year life of the loan it lessens the impact on a homeowner that needs help. Stop preaching to me.....I'm not taking anything from you. Go after welfare, the government that wastes our tax dollars in programs that are not necessary.
RE: Mark
December 1, 2008, 10:32am (report abuse)Mark, are you planning on buying a car for over $100,000, or a house for only $20,000? You are comparing apples to houses. When someone defaults on a car loan, which more and more people are doing, it does not have the same fiscal impact as defaulting on a home in a downward real estate market. My point is that people who put $9000 of their hard earned money toward the purchase of anything, a car, boat, home, etc., are much less likely to walk away from a loan obligation. You say it is not my money, I say it is. Not only am I going to pay for all these people defaulting, but most likely my children are too. I have yet hear a single viable argument from anybody in support of DPA that will address the question of how people with no savings will pay their mortgage should they fall on hard financial times. How will you pay your mortgage if you get laid off Mark?
Mark
December 1, 2008, 7:20pm (report abuse)Bill 3221, The Housing Recovery Act, or The Foreclosure Prevention Act, is the biggest failure in the history of the United States Congress. It is also the most tragic example of how our legislators can be swindled by another government agency, in this case FHA, into eliminating a vital and beneficial program. DPA requires NO tax dollars, is responsible for assisting thousands of Americans in purchasing a home, and generates home sales in all price points. It is imperative that Congress passes Bill 6694 to reinstate DPA and show the country that they are looking out for mainstreet Americans and not just bailing out special interest big business.
RE:J Johnson
December 2, 2008, 10:54am (report abuse)First of all....there are many many more autos in this country than homes, so defaulting on autos do add up just like homes. Also consider long term a home is an asset that appreciates unlike a car that depreciates. I could use all my resources to make that down payment but common sense would tell me to hold on to my Cash and use it for that rainy day you refer too. If I am laid off all my savings would be tied up in my home instead of in my bank so I could weather the storm. This is how I would address your concern to supporting DPA. You are paying for loans that people could not afford from the beginning with bad credit and income that was not required to be verified. I agree with you that the past DPA was a joke and should had not been passed in the first place. It allowed most EVERYONE to get a loan with no sound financial judgement. But hr 6694 is different. It looks at credit scores, job history and income.
RE: Mark
December 4, 2008, 9:39pm (report abuse)Honestly Mark, it matters little at this point. My children's future is being flushed down the toilet by the current shotgun approaches of giving away trillions of dollars to irresponsible people who never should have qualified for these loans to begin with. So whoopi, lets flush our grandchildren's futures as well by continuing the trend of irresponsible lending programs like DPA. You all fall into the category of people who believe that home ownership is a right. Unfortunately, for the rest of us, Democratic leadership believes the same. Just as an aside, what amazes me about so many people who can't afford to save for a home seem to have no problem affording a 52" flat panel television. But hey, I guess large flat panel television ownership is perceived as a right by the same people. There has never been a better and more rewarding time in this country for selfish, irresponsible people, what a joke.
Mel
December 4, 2008, 11:39pm (report abuse)What's taking so long to bring pass HR 6694?????????????????
re: Johnson
December 5, 2008, 9:49am (report abuse)I know you will find this hard to believe but I agree with you on most everything you wrote.I am in sales and see that people over the age of 65 usually owe nothing..have perfect credit and have paid cash for most everything in their life. We are broke not because of DPA but because our generation expects everything now and cannot wait. However my personal situation is that I owe nothing in credit cards, I drive a paid for 97 altima and work 55 hours a week. Me keeping my money and financing 100% is not costing you any money. I will pay my obligations as long as the good lord gives me the health and abiltiy to do so.
Always have and always will. DPA will cost each family .13 cent per year. Nothing compared to the return on local taxes and durable goods it will give in return. Also....I don't own a 52" flat screen, Its a 32" big A** color set from Wal mart that takes 3 people to move..:) Enjoyed discussing this topic with you....I guess we will see what happens after Jan 20.
M
December 9, 2008, 12:58pm (report abuse)It all comes down to the "trickle UP effect" Plumber Joe is unable to purchase first home because of lack of required funds, Teacher Sally can't sell her home and buy Banker Carlos home, who can't then buy Attorney Candace estate.
Karla
December 11, 2008, 1:56pm (report abuse)I support DPA programs 100% for many of the reasons brought up by people before me. I would just like to address the issue related to housing values. I closed 7 clients using the DPA program in 2008. All those clients purchased foreclosures or short sales (preforeclosures), homes that were already priced under market value, sometimes significantly. Our offers were at or slightly above asking price with DPA assistance. None of these sales resulted in inflated prices. With the quantity of unsold foreclosures and other housing inventory, we need these programs to give the housing market a boost, and it won't cost taxpayers the billions of dollars it would cost for the government to purchase this bad debt from the banks. Strengthen underwriting guidelines, don't kill the program.
Nate
December 12, 2008, 11:35pm (report abuse)I am so completely disgusted that DPA is rearing its ugly head again. Responsible homeowners are bearing the brunt of bailing out irresponsible morons that bought homes they could not afford and now there is talk of resurrecting DPA which allows people to purchase homes with virtually no money down. JFC!!! Do supporters of DPA really think we are that stupid or are they just greedy. I think we all know the answer to both is YES! So here we go again, I am certain the self-serving Democrats will push this through and Obama will sign it. Congratulations to all you greedy realtors and brokers, I'm sure you will get your wish.
Carl
December 15, 2008, 9:49am (report abuse)I'm curious Nate...what do you do for a living?
Nate
December 22, 2008, 6:00pm (report abuse)Well Carl, I think its pretty obvious that I am not a realtor or broker or any other profession that is connected to this huge lobbying effort to resurrect DPA just to boost sales at the expense of everyone else. I don't need to ask you the same because we both know the answer to that question.
RE: M
December 22, 2008, 6:10pm (report abuse)So, Plumber Joe is allowed to buy Teacher Sally's home even though he has nothing in the bank. Plumber Joe gets laid off. Because Plumber Joe has no savings, Plumber Joe defaults. Teacher Sally seems happy because she sold her house, but is now sad because the new home she purchased just lost value due to all the Plumber Joes. Hmm, seems like there is still a leak in the this theory about DPA.
carl
December 22, 2008, 7:08pm (report abuse)Well, Nate. I am neither. I sell Hondas so I guess your assumption is dead wrong. You are right when you say resurrecting DPA was stupid under the old program....but you need to read hr 6694. Buyers need good credit to take advantage of this program..the way it needed to be in the first place. So I will ask you again...what do you do for a living? If you are in sales...or your company sell products do they require down payments?
Nate
December 22, 2008, 9:47pm (report abuse)I am in software, customers pay the entire amount up front. There isn't a Honda dealership out there that would let a person drive away in a car without a reasonable down payment. And I'm certain the auto industry doesn't employ a rediculous gimmick like DPA. So what is your reason for supporting DPA? Do the new guidelines require people to have some savings should they fall on hard times? If they do have savings, then why should they qualify for DPA? Moreover, if they do have savings, doesn't that indicate they have the ability to save and all they have to do is save a little longer and won't need DPA? Please, give me a convincing argument why we need DPA, because I have read many of these pro DPA posts and have not come across one yet.
carl
December 23, 2008, 10:19am (report abuse)Software and they pay upfront. How do you know if that upfront payment came from a line of credit that they will have to pay back. What happens if they go under and leave the debt unpaid? Happens everyday just like it does in the housing business. Now to answer your question on Hondas....we will finance up to 120% of the value of a car. In this industry people come in everyday with big suv's with negative equity. Done every day with GOOD CREDIT. Thats my point...with good credit business all over the US including software sales sell products at 100% or more. Why should it be any different for Homes that INCREASE in value over time unlike the software you sell and the Honda's I sell. Business do not usually use their own money...they borrow it to buy goods to run their business as well as the product they sell so why should I use my savings and tie it up in a home when I could be using those funds for emergencies, provide for my family as well as invest as I see fit.
carl
December 23, 2008, 10:20am (report abuse)Merry Christmas