Question by DearAbby: Who is at fault for the Subprime Mortgage Crisis?
I’ve heard opinions that the subprime mortgage crisis is the result of predatory lending, buy more about prostate uneducated borrowers, over-valued homes, and a lack of government regulation. What do you think is the main cause? Are there other causes than the ones I mentioned? How do we avoid this situation in the future?
It sounds like there are a lot of groups to blame, but how do we keep this sort of crisis from recurring?
Best answer:
Answer by Greg S
Basically it is the fault of people loaning money to people that were high risk. And people that couldn’t afford loans taking them anyway. In both cases the root cause is greed.
Add your own answer in the comments!
Question by Fantasy Dominator: FHA/Ameridream assistance?
Whats the good & bad for these programs? My Husband and I have less then perfect credit so I heard that we should think about these 2 options…opinions? We are in the market for a foreclosed home (As MI tops the list)…for example we seen 1 home that would usually sell for $ 148, sildenafil 000 for $ 72, check 000)–Insane but true.
Best answer:
Answer by Miss V
The first person to determine if you qualify for FHA would be a mortgage lender. FHA’s minimum downpayment may be 3% of the loan which can be added to the loan if you don’t have the cash. Ameridream seems to be a ‘gift’ program that will assist with downpayment assistance however, as with most gift programs, the cost is added to the loan.
Know better? Leave your own answer in the comments!
OK. I am currently in Escrow with an FHA loan as well as Nehemiah which is like the ameridream.
FHA is a great program to help people secure a home loan. You only have to put down 3%. This can be a gift if you do not have it. The Ameridream is similar to the Nehemiah program in that it will give you a grant for the downpayment that does not have to be paid back. The seller will in turn donate the matxching amount up to 6%…the allowable limit FHA will allow.
So we are getting 3% from the Nehemiah program and the seller is also giving us 3% towards closing costs.
This is a great alternative to a conventional loan because it is not credit score driven and you do not have to come up with a 10-20% down payment that can’t be gifted.
Get with a mortgage lender to see if you qualify and Good Luck!
FHA is a fine program. Ameridream is a “gift” program that helps get you in for nothing down. A seller makes a “donation” to Ameridream and Ameridream makes a “gift” to you. So in effect the seller is paying your down payment. The seller often refuses to do this unless you pay a higher than normal amount for their house (to offset the “gift”). At the moment it is still legal and perfectly OK to do- just be sure you are getting as good a deal as you can- because you will start out with no equity on something like this.
Don’t be fooled by someone telling you that a house worth $ 148,000 can be bought for $ 72,000. The truth is that if a bank could sell a foreclosure for $ 148,000 they are required by their stockholders to sell it for $ 148,000.
What you should do is look at all houses that match your criteria (area, price, size, schools, etc) compare them all and buy the best home for the money. Don’t let someone fool you, judge for yourself.
Nehemiah DPA allows up to 6% seller gifts funds. I believe AmeriDream DPA allows up to 10%. http://www.gmacmwholesale.com/documents/gmacdocs/dpa/NonProfit_Gift_Grant_Programs/USA_CP02_117_AmeriDream_Charity_Inc.pdf
Unfortunately, these loans have been high risk in foreclosures. FHA has tried to stop insuring them, but they keep losing the court battles.
Prices are still declining in some areas. Yours may be one.
You may have to look at quite a few foreclosed homes to find one that will qualify for FHA financing. It can’t be in bad shape, there must be a heat source in every room, a clean pest report may be required, etc… Many banks that own these REO properties are not willing to make any repairs.