...right. But the money is so cheap to have, it looks like nobody wants it anymore. Like "Thank you, but thank you, no, I'm bursting".
And Bernanke hinted he would depress it further on the long end.
In this connection see
prudentbear.com
...Founded in 1999, AmeriDream is one of the more intriguing “Non-Profit” DPA players. Before HUD put an end to the practice, it was common for this group to “gift” money (in excess of required downpayments) that allowed problem borrowers to pay down debt – and thus meet minimum lender requirements. Today, “More than 4,000 homebuyers a month purchase their own homes using The AmeriDream Downpayment Gift Program, which provides down payment assistance of up to five percent or more of the home’s price.”
AmeriDream has quickly developed into very Big Business. The group provided 50,000 downpayments last year, and with fees of .75% of a home’s sale price, we’re talking serious money. AmeriDream achieved $146.5 million of “total operating revenue and other support” during 2001, up from 2000’s $36 million. “…AmeriDream Charity constantly seeks ways to make homeownership an obtainable goal for more families. Based on feedback from its many lender, builder and Realtor participants, AmeriDream recognized a need to bring more creative loan products and secondary market solutions to the marketplace...
From National Mortgage News, December 2002 (Brian Collins): “The Department of Housing and Urban Development’s Inspector General (IG) is raising concerns again that the Nehemiah downpayment gift assistance program and other nonprofits like it are taking a toll on the performance of the Federal Housing Administration single-family program. In an update of a previous audit of Nehemiah-assisted loans, the HUD IG found the default rate had quadrupled from 4.6% in October 1999 to 19.42% in February 2002. ‘Allowing the continuation of seller-derived downpayments puts the FHA insurance fund at a greater risk and may result in higher mortgage insurance premiums to the detriment of homebuyers not receiving this type of assistance,’ the IG report says... In a March 2000 audit report, the HUD IG recommended a prohibition on home sellers and builders contributing to DPAs. The IG basically took the position that the seller-derived gifts are illegal... But the proposal ran into opposition from Nehemiah and others and HUD eventually withdrew it…” Quoting Bill Apgar, previous FHA commissioner and currently with Harvard University’s Joint Center for Housing Studies: “‘When we were pushing reform ideas two year ago, there was a chance to get some control over the (DAP) programs.’ But now HUD has to deal with a bigger problem because the loan volumes are higher and ‘you can’t afford to make a mistake.’” |
