Nehemiah downpayer assitance likely to end

[demi]

Thougt people should know about this.  Downpayer assistance plans may be gone.

http://www.sacbee.com/103/story/1099122.html

[Anonymous]

Although I've always been ambivalent about these programs, I think this is really sad.  One thing that these down payment assistance programs do is TEACH.  Before a homeowner receives the down payment assistance, he has to go through a series of workshops and meet individually with financial counselors who will explain financing, budgeting and how to make it through the inevitable ups and downs of finance.

I've always believed that saving for your own down payment is important because it teaches you to save, but I know for millions of Americans that make minimum wage or less, this makes it impossible to come up with even 3%.  It can be done, but only through years of sacrifice and careful budgeting.

It is a sad day.  Probably necessary.  But sad nonetheless.

(Maybe they should tax all those mortgage brokers, fraudulent appraisers, and lax lenders -- along with the heads of Indymac, Countrywide, and other subprime mortgage companies -- and put that money in a special fund for an FHA down payment assistance program.)

[Anonymous]

The bottom line is that, in order for sanity to be restored to the housing market, all of this faux money needs to be sluiced out of it. People act as if the fraudulent mortgages were the only issue, but actually it went far deeper than that. Even in the Nineties, houses were still overpriced. The only way any common person could afford a home was for a banker to shove a huge pile of money his/her way.

What do you suppose would happen to the price of groceries if you couldn't pay cash, and a bank had to write you a loan? They'd be competing to see how much money they could shovel at you, and in a matter of months, bread would be $8 a loaf, and a case of Coke would set you back $20.

There are half a dozen artificial stimuli to the demand for housing, not the least of which is the mortgage income tax credit. Why should people get to write mortgage interest off their tax returns? Why subsidize debt?

The way interest rates are moving up, and incomes are moving down, I think the housing correction is just starting. I wouldn't be surprised to see a 20 to 30% correction in the next two or three years. I don't think the American public realizes just how much fake, printed, loaned, sold and resold and subsidized money is still chasing houses...and what's going to happen when it goes away.

[MattH]

http://affordablehousinginstitute.org/blogs/us/2008/06/seller-paid-down-payments-fundamentally-flawed.html