Comments on: Down Payment Assistance Rears It’s Ugly Head Again http://www.biggerpockets.com/renewsblog/2009/01/31/payment-assistance-rears-ugly-head/ Learn, Network, Invest Tue, 24 Nov 2009 02:35:52 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Cappadocia http://www.biggerpockets.com/renewsblog/2009/01/31/payment-assistance-rears-ugly-head/comment-page-1/#comment-65647 Cappadocia Fri, 15 May 2009 09:21:03 +0000 http://www.biggerpockets.com/renewsblog/?p=3853#comment-65647 People on multiple sites, blogs, and in the news have failed to address or mention the true “Root” of all of this mess. Every bit of this is directly due to the fact that there was not clear guidelines and rules established and “ENFORCED” when DPA was being used in the past. DPA is not an issue when the guidelines and rules that govern it are being fully used and enforced. The obvious main reason for so many lenders, sellers, builders in the past to abuse the program, was “GREED’. People on multiple sites, blogs, and in the news have failed to address or mention the true “Root” of all of this mess. Every bit of this is directly due to the fact that there was not clear guidelines and rules established and “ENFORCED” when DPA was being used in the past. DPA is not an issue when the guidelines and rules that govern it are being fully used and enforced. The obvious main reason for so many lenders, sellers, builders in the past to abuse the program, was “GREED’.

]]> By: Chris Spor http://www.biggerpockets.com/renewsblog/2009/01/31/payment-assistance-rears-ugly-head/comment-page-1/#comment-64148 Chris Spor Tue, 24 Feb 2009 21:24:38 +0000 http://www.biggerpockets.com/renewsblog/?p=3853#comment-64148 People on multiple sites, blogs, and in the news have failed to address or mention the true "Root" of all of this mess. Every bit of this is directly due to the fact that there was not clear guidelines and rules established and "ENFORCED" when DPA was being used in the past. DPA is not an issue when the guidelines and rules that govern it are being fully used and enforced. The obvious main reason for so many lenders, sellers, builders in the past to abuse the program, was "GREED'. They wanted the money today, so they turned a blind eye, and allowed people to buy when they did not verify income, or true ability to pay. Point in case, if you wanted to buy a house today, lenders will figure your debt to income ratio, on just the debt that has to do with monthly bills for credit cards, cars, electric, water, etc. they don't even mention or figure in living expenses for a person, persons, or family that when hard times come, they will buy and pay for (food, clothing, gas), and let the mortgage slip. They basically help people buy a home, and become house poor, right off the bat, and place them right on the edge, and hope they don't sink, because they are greedy themselves, and want to close another loan. DPA is a good program that when placed in the hands of greedy untrustworthy people becomes perverted. There is a happy medium here, you don't have to throw out the baby with the bath water. Set clear guidelines, attach jail sentences and fines (the jail sentence should be first) to those who cross over the line, period end of story. Once again America takes a soft line on something so important, and we wonder what went wrong, then the knee jerk reaction at the outcome, without getting to the root problem. People on multiple sites, blogs, and in the news have failed to address or mention the true “Root” of all of this mess. Every bit of this is directly due to the fact that there was not clear guidelines and rules established and “ENFORCED” when DPA was being used in the past. DPA is not an issue when the guidelines and rules that govern it are being fully used and enforced. The obvious main reason for so many lenders, sellers, builders in the past to abuse the program, was “GREED’. They wanted the money today, so they turned a blind eye, and allowed people to buy when they did not verify income, or true ability to pay. Point in case, if you wanted to buy a house today, lenders will figure your debt to income ratio, on just the debt that has to do with monthly bills for credit cards, cars, electric, water, etc. they don’t even mention or figure in living expenses for a person, persons, or family that when hard times come, they will buy and pay for (food, clothing, gas), and let the mortgage slip. They basically help people buy a home, and become house poor, right off the bat, and place them right on the edge, and hope they don’t sink, because they are greedy themselves, and want to close another loan.
DPA is a good program that when placed in the hands of greedy untrustworthy people becomes perverted. There is a happy medium here, you don’t have to throw out the baby with the bath water. Set clear guidelines, attach jail sentences and fines (the jail sentence should be first) to those who cross over the line, period end of story. Once again America takes a soft line on something so important, and we wonder what went wrong, then the knee jerk reaction at the outcome, without getting to the root problem.

]]> By: Daniel Callison http://www.biggerpockets.com/renewsblog/2009/01/31/payment-assistance-rears-ugly-head/comment-page-1/#comment-63931 Daniel Callison Tue, 17 Feb 2009 21:00:18 +0000 http://www.biggerpockets.com/renewsblog/?p=3853#comment-63931 DPA's are an awesome tool in a high market area. My wife and i make well into the six figures but with outrageous rent in the washington metro area we had to turn to Ameridream to assist with the purchase of our first home. We didnt have a rich uncle or parents to give us the 20000 required for downpayment on our 350000 FHA insured mortage! Doing away with DPA is a HUGE loss to our economy and further troubling the houseing market. We CAN make out mortage payments, we have been paying ahead even. So to the author of this article, please take head in making generalizations. We both have college degrees and great jobs in the IT field, but could NOT have started building our families home without Ameridream! I truely hope this is still in the bill because at least 3 other couples i know are in our shoes and need this type of assistance to start the road to home ownership. DPA’s are an awesome tool in a high market area. My wife and i make well into the six figures but with outrageous rent in the washington metro area we had to turn to Ameridream to assist with the purchase of our first home. We didnt have a rich uncle or parents to give us the 20000 required for downpayment on our 350000 FHA insured mortage! Doing away with DPA is a HUGE loss to our economy and further troubling the houseing market. We CAN make out mortage payments, we have been paying ahead even. So to the author of this article, please take head in making generalizations. We both have college degrees and great jobs in the IT field, but could NOT have started building our families home without Ameridream! I truely hope this is still in the bill because at least 3 other couples i know are in our shoes and need this type of assistance to start the road to home ownership.

]]> By: Cindy http://www.biggerpockets.com/renewsblog/2009/01/31/payment-assistance-rears-ugly-head/comment-page-1/#comment-63591 Cindy Mon, 02 Feb 2009 22:35:40 +0000 http://www.biggerpockets.com/renewsblog/?p=3853#comment-63591 Homebuilders are one of the biggest users of DPA's, and from news articles I've read, quite a few foreclosures are in new developments. Years ago there were warnings that prices were being artificially inflated, that bubbles always burst, and that mortgage fraud was rampant and a danger to the economy. DPA's were criticized by the IRS and HUD as well as others, called a money laundering scam and it was proven they led to more foreclosures and inflated values. The FBI said mortgage fraud was being done mostly by the industry itself; their plea for more resources to fight it were ignored by those in power. All these warnings were ignored by mainstream media, the govt, and of course the industry and any flippers who fancied themselves as savvy investors. When the whole thing predictably crashed, the industry made itself out to be a victim instead of the perpetrator, and demanded various bailouts...still is demanding. At least HUD and Congress had the sense to ban these DPA's, one step in the right direction. Now the industry is again using it's immense coffers and political connections to try and inflate the bubble again. None of this has a thing to do w/homeownership, but it has everything to do w/corporate profit. That our elected officials would even give them the time of day is obscene. Homebuilders are one of the biggest users of DPA’s, and from news articles I’ve read, quite a few foreclosures are in new developments. Years ago there were warnings that prices were being artificially inflated, that bubbles always burst, and that mortgage fraud was rampant and a danger to the economy. DPA’s were criticized by the IRS and HUD as well as others, called a money laundering scam and it was proven they led to more foreclosures and inflated values. The FBI said mortgage fraud was being done mostly by the industry itself; their plea for more resources to fight it were ignored by those in power.

All these warnings were ignored by mainstream media, the govt, and of course the industry and any flippers who fancied themselves as savvy investors. When the whole thing predictably crashed, the industry made itself out to be a victim instead of the perpetrator, and demanded various bailouts…still is demanding. At least HUD and Congress had the sense to ban these DPA’s, one step in the right direction. Now the industry is again using it’s immense coffers and political connections to try and inflate the bubble again. None of this has a thing to do w/homeownership, but it has everything to do w/corporate profit. That our elected officials would even give them the time of day is obscene.

]]> By: Rob Blake http://www.biggerpockets.com/renewsblog/2009/01/31/payment-assistance-rears-ugly-head/comment-page-1/#comment-63583 Rob Blake Mon, 02 Feb 2009 19:29:32 +0000 http://www.biggerpockets.com/renewsblog/?p=3853#comment-63583 "Easy money" programs ARE the cause of our housing bubble and subsequent bust...DPAs being one of them. You can read the actual HUD and GAO study <a href="http://themortgageinsider.net/mortgage/down-payment-assistance-programs-outlawed/" rel="nofollow">here</a> if you don't believe that DPA borrowers default at 3 times the norm. Creating a "new bubble" regardless of who it "helps" in the short run, kills us all in the long run. Natural housing market equilibrium is the goal...and the sooner we hit it..the better for ALL Americans...not just home builders and real estate agents. “Easy money” programs ARE the cause of our housing bubble and subsequent bust…DPAs being one of them.

You can read the actual HUD and GAO study here if you don’t believe that DPA borrowers default at 3 times the norm.

Creating a “new bubble” regardless of who it “helps” in the short run, kills us all in the long run.

Natural housing market equilibrium is the goal…and the sooner we hit it..the better for ALL Americans…not just home builders and real estate agents.

]]> By: Alexis May http://www.biggerpockets.com/renewsblog/2009/01/31/payment-assistance-rears-ugly-head/comment-page-1/#comment-63581 Alexis May Mon, 02 Feb 2009 18:08:41 +0000 http://www.biggerpockets.com/renewsblog/?p=3853#comment-63581 The dpa programs are not the problem with our current economic crisis. I have yet to see a report which outlines dpa produced "3 times the foreclosure rate than norm"...this statement is not only FALSE but is the main reason why so many are against the program. The cause for the default on mortgages is due to the shady lending (adjustable rate mortgages) which created balloon payments for the homebuyer which they could not afford. The dpa programs are used with FHA loans which are fixed mortgages- the monthly payments are consistent. Nonetheless, the dpa programs did not create the problem. In addition, these programs help stimulate the economy. They help provide work for realtors, title companies, lenders and everyone associated with the real estate process. Currently, the housing market is down because there are no programs out there to help our citizens. Many of you are responding “if you can’t save your own money then you should not be able to buy a home”. Should we apply this way of thinking to higher education too? The interesting thing is our tax dollars are distributed to higher education, for those working Americans who can’t afford to pay for the children’s education. How many of you know of a program that helps thousands of families buy homes and costs the government zero dollars? My point is before you judge dpa programs, get the facts straight. - concerned citizen- The dpa programs are not the problem with our current economic crisis. I have yet to see a report which outlines dpa produced “3 times the foreclosure rate than norm”…this statement is not only FALSE but is the main reason why so many are against the program. The cause for the default on mortgages is due to the shady lending (adjustable rate mortgages) which created balloon payments for the homebuyer which they could not afford. The dpa programs are used with FHA loans which are fixed mortgages- the monthly payments are consistent. Nonetheless, the dpa programs did not create the problem.

In addition, these programs help stimulate the economy. They help provide work for realtors, title companies, lenders and everyone associated with the real estate process. Currently, the housing market is down because there are no programs out there to help our citizens. Many of you are responding “if you can’t save your own money then you should not be able to buy a home”.
Should we apply this way of thinking to higher education too? The interesting thing is our tax dollars are distributed to higher education, for those working Americans who can’t afford to pay for the children’s education. How many of you know of a program that helps thousands of families buy homes and costs the government zero dollars? My point is before you judge dpa programs, get the facts straight.
- concerned citizen-

]]> By: Lisa Cooper http://www.biggerpockets.com/renewsblog/2009/01/31/payment-assistance-rears-ugly-head/comment-page-1/#comment-63564 Lisa Cooper Mon, 02 Feb 2009 01:27:42 +0000 http://www.biggerpockets.com/renewsblog/?p=3853#comment-63564 Seller financed down payment assistance is money laundering, plain and simple. I'm not really a big fan of these programs in general. <abbr><em>Laguna Niguel Real Estate’s last blog post: <a href="http://lisacooper.com/positive-information-on-remodeling-now" rel="nofollow">Positive Information on Remodeling Now…</a></em></abbr> Seller financed down payment assistance is money laundering, plain and simple. I’m not really a big fan of these programs in general.

Laguna Niguel Real Estate’s last blog post: Positive Information on Remodeling Now…

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