Without learning anything from sub-prime the Americans (read: Govt) are putting folks in homes for $100 to try and save its housing market that still appears to be plunging in some areas with no end in sight.
Its simple, you borrow from Uncle Sam and you can also borrow for *ahem* improvements to make it habitable. And, its non recourse so you can walk away from it when you feel inclined.
You can't make this shit up. HUD Offers REO Homes for $100 Down in Select State.
HUD has approved a program aimed at putting foreclosed homes back into the hands of owner-occupant buyers.
In select states, from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home.
The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Standard FHA underwriting guidelines apply, and the sale must be for the full amount of the current list price.
The $100 down payment incentive program has been approved for two of HUD’s four national regions – the regions managed by the Denver Homeownership Center and the Atlanta Homeownership Center. HUD homes in the states listed, as well as the Caribbean are currently eligible for the program.
See link above for the list of eligible states.
With an FHA 203k loan, “buyers can find a property that needs some TLC, fix it up however they want to, and finance the whole thing for $100,” Martin explained.
“MMREM is excited to work with this recent initiative, in a way that it supports putting HUD homes back into the hands of homeowners,” Martin said.
In addition to $100 down instead of FHA’s typical 3.5 percent down payment, HUD says it will also cover up to 3 percent of the closing costs in most cases.
HUD provides any American with $100 in their wallet, the ability to lever up by a factor of >2000x and use the proceeds for pretty much anything (but make sure to call it "home repairs"). And when the scheme is stuck with hundreds of billions of non-performing, delinquent loans, what then?
This from a nation with over $15Trillion in debt, over $100Trillion in unfunded liabilities and bankrupt states and banks across the land. You can't make this shit up normally, but you can when the President is as popular as a bacon sandwich at a bar mitzvah and its election time.
It's amazing isn't it?
ReplyDeleteReminds me of this Einstein quote:
"We can't solve problems by using the same kind of thinking we used when we created them."
It's the same kind of thinking alright, from the same kind of people.
On PBS Newshour (on SBS a few minutes ago) they were talking about Las Vegas home owners - one of which bought for $210K in 2007 and just sold for $70K. Their supposed solution to the problem is to refinance the debt using Fannie Mae and Freddie Mac. We'll see how that goes I guess.
Personally I see it as a battle with two opposing sides - the rich creditors and the poor borrowers. Someone has to lose, but I know which one has the lobbying power.