The program allows lenders to self-police, bringing back memories of the “anything-goes” standards that crashed the housing market.
Nearly a year into a special lending program aimed at underserved homebuyers, the initiative is soon to expand from a few banks to mainstream, non-banking lenders.Launched in February this year, the Special Purpose Credit Program is the government’s way of getting mortgage lenders to expand access to credit. More specifically, it gives mortgage lenders the freedom to come up with zero-down loan programs that support first-time buyers in underserved communities.
Several experts I interviewed cited a lack of down payment funds as a significant barrier to homeownership. So, zero down, zero closing cost SPCPs can work, they said, especially when reasonable underwriting standards are added to the credit decision rigor. A BofA spokesperson declined to say how many people have applied in the Los Angeles market or what percentage of applicants were approved.
It’s unclear if or when BofA will be expanding the program Orange, Riverside and San Bernardino counties. What happens if such programs become a free-for-all? Choi told me Fannie and Freddie are gearing up to roll out their own SPCPs. Mortgage lenders are going to be making those loans and selling them to F & F.leading up to the mortgage crisis. Mortgages got funded that should never have been funded. Those loans were sold to investors or pooled as mortgage-backed securities. Somebody else was left holding the bag when the borrowers couldn’t pay.
Bottom line: Assuming a borrower gets the average 30-year fixed rate on a conforming $647,200 loan, last year’s payment was $1,374 less than this week’s payment of $4,138.
France Dernières Nouvelles, France Actualités
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