Got a hundred bucks? Buy a house!

[InvalidID]

Well folks, get ready to blow your tops! I won't even give you my own thoughts on this one really. I think it's pretty clear how this will end.

Today's adjustment to the government's HARP program to get anything with a pulse as close to the discount window as possible was not the only proposal to revive the moribund US housing market. According to a new proposal by HUD, beginning this month and continuing for a year, anyone with a just $100 will be allowed to buy a HUD-owned REO home. In essence: the new buyer is merely taking over the mortgage payments in a repeat of what happened in 1970s New York along the Central Park West corridor. Granted for now it is stricly limited to only... 28 states! But it gets better: "HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan." Said otherwise, a $100 downpayment gives one unlimited degrees of freedom how to spend non-recourse, massively levered capital, and courtesy of money's fungibility, to even fund, shhh, the occasional iPhone.


http://www.zerohedge.com/news/got-hu...ourse-leverage

[AngieM2]

This is interesting.
Now I have to ask a couple of real estate professionals about this.

[AngieM2]

I wonder if taking over the house payments, if it's the foreclosed mortgage amount, or the current value of the house payments?
And when I think of only $100 down, and getting payments - I think if I did something like that, what about the $400 are $500 or so a month, and the electricity and upkeep,

I'm thinking another train is leaving the station, but the bridge across the fiscal river is out about 1/2 across the span.

[fishinshawn]

So I read the article. I don't know alot about the FHA programs, but if it is there, I missed the part where anyone, including people with bad credit, could get a loan?

[ChickenHopeful]

Originally Posted by fishinshawn

I missed the part where anyone, including people with bad credit, could get a loan?

Bad credit for this is probably just swept under the rug. Anyone else feel some Deja Vu?

[InvalidID]

Well, clearly my gut reaction to this was negative. I've been putting more thought into it and I'm kinda 50-50 here. As I thought about it, I do like the idea of getting these homes off the government rolls, but I don't like the idea of just letting anyone with 100 bucks into them either.

Wouldn't it have been more prudent to rent those homes out at the carry cost and allow for a small credit of rent towards the down payment? A person could establish themselves and prove they have a solid history.

@Fishin It's not the credit of the people I'm concerned with. It's cash. Why are we making loans to people that don't have the money to put money down? Top that off with offering to add to the loan so you can fix the place up and it concerns me a lot.

[Kmac15]

I listened to a commercial on the radio today talking about a great rate on adjustable mortgages....said why pay a fixed rate on a house that you won't even own by the time the rates adjust up.....I thought we had already learned our lesson on this.

[Forerunner]

It's all about perfecting the lien they have on the individual.

The more government subsidy one accepts, the more that individual is, literally, owned by the principle that owns the government.
THAT is why they seem to give money to just about anybody.
They are buying slaves.

[Belfrybat]

Originally Posted by InvalidID

Well, clearly my gut reaction to this was negative. I've been putting more thought into it and I'm kinda 50-50 here. As I thought about it, I do like the idea of getting these homes off the government rolls, but I don't like the idea of just letting anyone with 100 bucks into them either.

Wouldn't it have been more prudent to rent those homes out at the carry cost and allow for a small credit of rent towards the down payment? A person could establish themselves and prove they have a solid history.

@Fishin It's not the credit of the people I'm concerned with. It's cash. Why are we making loans to people that don't have the money to put money down? Top that off with offering to add to the loan so you can fix the place up and it concerns me a lot.

I agree about the idea of rent to own -- that would put more people in homes they could eventually call their own.

I'm not against a low downpayment as long as a credit check is run. Very few people these days have $10,000-20,000 hanging around for a downpayment, but many can afford house payments. And don't forget that while the downpayment might only be $100. there are closing costs to be figured in.

[time]

Well, you end up with instant underwater homes don't you?

If you buy your home with the $100 down, roll the closing costs into the loan(this is still done), your probably underwater to start. Add in an additional amount to rehabilitate the home and viola, your underwater for years. If you default, the lienholder cannot recoup the loss by selling the house. A bunch of defaults like this, and the lien holder ends up defaulting. Same-same as the 2008 crash.

It's just a shorter, more direct approach to the past. buy at low down payment, run out and get second mortgage, refi for one single payment, default on underwater home process.

Or am I missing something?

[InvalidID]

Thing is this time the lien holder is the government. They can never go belly up right? LMAO

Belfry they are adding in a little money for fixing the place up, they are paying part of the closing costs, and they let you roll closing costs into the loan. All this sounds an awful lot like the reason we have all these foreclosed homes out there to begin with to me. That's really my issue here. Why would we do the same thing that got us into trouble, to get us out of trouble....

[Bluesgal]

Originally Posted by InvalidID

Thing is this time the lien holder is the government. They can never go belly up right? LMAO

Belfry they are adding in a little money for fixing the place up, they are paying part of the closing costs, and they let you roll closing costs into the loan. All this sounds an awful lot like the reason we have all these foreclosed homes out there to begin with to me. That's really my issue here. Why would we do the same thing that got us into trouble, to get us out of trouble....

Insanity: doing the same thing over and over again and expecting different results.
Albert Einstein

[AngieM2]

Bluesgat - I think you've summed it up nicely.

And it is tempting for those wanting to purchase, but have been paying things off before having funds for saving for a downpayment.

[Bluesgal]

Curious that the two states that are number 1 and number 2 on the list for the highest number of foreclosures.. are not on this list..... Nevada and AZ... and Michigan isn't on the list of 18 states either....

[Aintlifegrand]

Originally Posted by Forerunner

It's all about perfecting the lien they have on the individual.

The more government subsidy one accepts, the more that individual is, literally, owned by the principle that owns the government.
THAT is why they seem to give money to just about anybody.
They are buying slaves.

Yes sir you are right.

[InvalidID]

Originally Posted by Forerunner

It's all about perfecting the lien they have on the individual.

The more government subsidy one accepts, the more that individual is, literally, owned by the principle that owns the government.
THAT is why they seem to give money to just about anybody.
They are buying slaves.

Dangerous business, owning slaves. Problem comes when the slaves realize they have more power than the masters...

[ghmerrill]

I like what mason weaver says about slavery- you are either a slave or a prisoner. A slave waits for the master to tell them what to do, how to do it, and when to do it. In exchange, the master takes care of their needs. A prisoner actively looks for a way out, and if the prisoner finds one, the prisoner will go through great lengths to accomplish freedom. Thats the difference- the mindset.

I'm a prisoner of the system, not a slave!

[jerrwhy]

So we're about a year out from the elections give or take. Does anybody else see a possible correlation here or is it just me?

[AngieM2]

I sent a link to a guy here at work that does real estate in his family.

"Yea I’ve heard about it. HUD has been doing this for a while now really. It was just called something else. Most mortgage places for some reason won’t tell people about it."

"Usually it has to be a 620 or higher credit score. They have the rural housing loan which gets you in a house with no down payment also. The only thing is it can’t be in the city limits"

Might be something to check out on this Rural housing loans. I've looked at them before, and they do qualify for the 203K.

Angie

[InvalidID]

Originally Posted by AngieM2

I sent a link to a guy here at work that does real estate in his family.

"Yea I’ve heard about it. HUD has been doing this for a while now really. It was just called something else. Most mortgage places for some reason won’t tell people about it."

"Usually it has to be a 620 or higher credit score. They have the rural housing loan which gets you in a house with no down payment also. The only thing is it can’t be in the city limits"

Might be something to check out on this Rural housing loans. I've looked at them before, and they do qualify for the 203K.

Angie

Thanks for the info Ang. That is very interesting isn't it? I suppose if they have a rural plan it might be something many of our city bound members should look into. Perhaps something for you to consider as well. The country needs more folks like you.