On Sep 25, 11:35*am, RickH wrote:
On Sep 25, 10:13*am, wrote:





On Sep 25, 10:14*am, wrote:

On Thu, 25 Sep 2008 04:40:04 -0700 (PDT), wrote:
Now I believe there is plenty of blame to spread around for the
current crisis. *And that blame goes to both parties, blind greed on
wall street, execs at Fannie and Freddie cooking the books to get tens
of million in bonuses, the borrowers, etc. * However, the above
statement is totally inaccurate. * The Act referred to above provided
assistance to first time home buyers in the form of helping with the
down-payment and/or closing costs. * First time buyers who were at 80%
of the mean income level for the area or below, could get up to 6% of
the purchase price or $10,000 toward the purchase. * *That did not
take away or reduce the requirement for a down-payment to secure the
loan. * * It just meant part of the down-payment was coming from the
govt.

It meant THE down payment was coming from the Gov. *The lenders were
accepting that amount. The old 20% down rule was a thing of the past.

It meant at least part of the down payment was coming from the govt.
There was nothing in the American Dream Down Payment Act that had
anything to do with or changed how much the down payment had to be.
If you get a mortgage secured by a down payment of X%, with all other
things, ie salary, credit history, honest appraisal, etc being equal,
it provides the same security cushion for the lender regardless of
where the down payment came from. * Plenty of down payments come at
least in part as gifts from parents to children. *In this case, it
came from the govt. *Isn't that what liberal Dems want? * For the govt
to help out those less fortunate?- Hide quoted text -

- Show quoted text -

A down payment from anyone but the potential homeowner is not truly a
down payment, its just another loan. *

Nonsense. A loan comes with an obligation to pay it back. In the
case of the Amercian Dream Act, there was no obligation to ever pay it
back. In the case of a gift that a parent gives a child, there is no
oblgation to pay it back, it's a gift.


The whole purpose of down
payment is that the new homeowner FEEL and HAVE a real stake in the
property. *Without painful and REAL downpayments, the system is doomed
because Mr and Mrs Smith can walk away too easily knowing they have no
large stake in the property, and are just walking away from two
lenders instead of one, the morgager and the down-payment lender.- Hide quoted text -

- Show quoted text -

While it's certainly true that putting up the down payment means the
homeowner will feel they have a real stake in the property, it;s
certainly NOT the whole purpose of a down payment. The main purpose
of the down payment is so that there is enough cushion for the lender
to be able to foreclose on the loan if necessary and still recover
100% of the loan.