2009-04-04 — calculatedriskblog.com
"For years I've complained about FHA related seller-funded Down payment Assistance Programs (DAPs). These programs circumvented the FHA down payment requirements by having the seller funnel the "down payment" to the buyer through a "charity" (for a small fee of course). In 2008, low end buyers with no money for a down payment, flocked to these programs with predictable results ..."
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Comments:
Starke at 19:49 2009-04-05 said:
Look...clearly the seller funded, downpayment assistance programs were little more than a legal form of money laundering to circumvent the system but to basically say that they're the sole reason for high default rates on FHA loans is just an unintelligent response, period. It's probably not possible to do so but I'd bet that if you looked back at all the loans funded this way, AND looked at the fico scores of these borrowers that you'd see a much higher percentage of these loans delinquent with lower credit score borrowers. As for the current default rate? Hmmmm 600,000 to 700,000 lost jobs per month for the last couple of years have anything to do with that? I wonder. Permalinkadd a comment | go to forum thread
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