Reading, Reading, Reading. Today it seemed to be all about some modifications of loan down payment amounts. Not all financial institutions are agreeing to them, but seems as if it's a plan that is moving forward.
L.A.Times had this one: Should a 20% Mortgage Down-Payment Be Standard?
And, this one on Inman this morning too: Consumer Group Defends Low Down Payments.
Basically will reward those that have enough for 20% down, and of course, penalize those that don't. But, some would say that the larger down doesn't mean they won't default on their loan. That it isn't the money they stand to lose that we should be watching, but the qualification of their original loan application. Yes!
And those lenders, the ones that fudge the applications......still today? Some will be required to be held accountable for a small portion of those loans even if the note is sold. And, we all know the notes are sold religiously and quickly. I've had some sold before the buyers new home has it's first payment due! So, if they have to hold 5% of that loan, it will tie up their capital....the banks certainly won't want that. And, won't want the risk of a default either.
So, I'm not sure how I feel about it. I've always felt the more you put down, the less likely a default. But, there is proof, in my buyers' pudding, that the small down-payment doesn't equal quick to trustee sale. And, really, don't qualify a buyer for more than they can afford, ever.
Thoughts?
No comments:
Post a Comment