This will definitely affect homes for sale in Everett. This will definitely affect homes for sale in Snohomish County. It will have an affect on mortgages in Everett and everywhere else in America.
Here’s the bogus idea of the year- Lets start another real estate bubble. We didn’t learn from the last one so lets do it again.
Democratic Representatives Al Green, Maxine Waters, Robert Wexler and nine others in Congress are backing a bill now that would restore zero down loans to buy homes for sale in Everett. This practice was banned as of last October, called “seller assisted down payments”. And can you believe it these loans will be backed by FHA mortgages so, Ya you guessed it, the taxpayer will be on the hook for more foreclosures.
Deja vu all over again
HR600 is about “Seller Assisted Down Payments,” which is a euphemism for a scheme that enables people who cannot save enough money to make a down payment, to qualify for FHA insured mortgages. Take a person who can’t save 3.5% of the purchase price and now what makes you think they will honor a mortgage?
Here’s how it works: A seller can make a 3.5% donation to a charity that in turns makes a donation back to the buyer of the 3.5%. The charity charges a fee for this. Now the seller can up his price or can take it from his proceeds. That will depend on what the market is like. The home must appraise for the new price. But here is one thing for sure; the buyer will have no real equity in the home.
The charities are big backer of this, and I’ll bet you just wonder why. Ya again there is big money in it. There are 11 democrats and one republican backing this. Oh lets not forget National Associations of Realtors, Homebuilders, and Mortgage Brokers lest you be surprised.
Last October the seller assisted down payment plans were eliminated because it was found that these mortgages defaulted at a MUCH higher rate than ones with a buyer who had real money in the deal. Ya I’ll bet that’s a big surprise too.
The supporters of this bill think it is a great time to buy real estate. And just who you think they want to buy? Ya you guessed it, those who can’t save up a lousy 3.5%. Don’t we already have enough of a problem with mortgages being underwater? Why would we want to create more of them?
Why would you the taxpayer want to reinstate a failed program just so the taxpayers can bail it out again? I guess somebody didn’t get the memo, zero down is not a good idea. It wasn’t between 2006 at 2008 and it will not be now.
Rep. Maxine Waters and her peers say the legislation is important because it helps African Americans and other minorities who cannot come up with a down payment to “realize the dream of home ownership”. Well I say that is as bogus a statement as I have ever heard. These loans have a 28% failure rate. That is an astronomical foreclosure rate. We would have to raise mortgage insurance rates on every existing FHA loan just to cover the expected loses.
Ya this will effect homes for sale in Everett but not in a good way.
Jim Johnson and comments are always welcome.
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