HUD Cracking Down on DAPs Now?

07/22/2016
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Down Payment Assistance Programs have been a stable for Low to Moderate Income borrowers when it comes to buying a home.  Well, now there seems to be some sort of internal HUD squabble about the integrity of these programs.  What’s more is it would appear that HUD will go so far as to bring lawsuits against DAP providers around the country.  You may want to check with whatever DAP’s you’re using in your area to see if there are any impending issues.

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Comments
  • Christopher Walken. COme…walk…into my…open HOUse.

    Matt July 22, 2016 5:47 am Reply
  • Hi guys, love your show!!! It would be awesome to see a video on how BofA or Bank of America is in my opinion steering customers to use their loan officers sitting at the bank branches. In 2 instances buyers would come in to ask for a wire or cashier check to send to escrow for their initial EMD to purchase a home. The bank tellers would than state that they would waive the wire / cashier fees if only and only after they speak with their loan officer sitting at the branch. I am not sure if this is steering or illegal but it would be nice to see some research on this and the outcome. Thank you and have a great day!!!

    Quy Huynh July 22, 2016 8:31 am Reply
  • By DPA federal grant programs, you mean my tax dollars subsidizing low income borrowers’ ability to purchase homes that they can’t afford.
    Funny how quickly we forget the lessons of the last bubble. First lesson; it’s not healthy for our economy to push people into home-ownership when they are not financially ready. Second lesson; when you remove common-sense barriers to home-ownership; ie. minimum credit score requirements, minimum debt-to-income ratios, AND required down-payment from borrowers, you quickly inflate a non-sustainable housing market that will eventually crash like a house of cards. You should really study some economic history before you start in with the “every American deserves to be a home-owner” mantra. It’s already proven to be a failed experiment

    Jim July 22, 2016 9:58 am Reply
  • Good show guys as usual, but the sky is not falling on DAPs yet and highly unlikely.
    A couple of important notes:
    1) HUD still believes DAPs funded through HFAs with premium pricing is legit.
    2) DAPs make up about 70% of our database of 2500 homeownership programs and the DAPs under investigation- those funded with premium pricing through HFAs are less than 12%. Plenty more solutions.
    To the “here we go again, skin in the game” crowd: Really??? That tired narrative has been debunked with facts for quite some time now. Time to update your Ed Pinto and Peter Wallison shtick. Read Bethany McLean’s “Shaky Ground”. And, stop whining about your tax dollars funding these programs. These DAPs in particular are funded through traditional MBS which are bought and paid for by investors.
    Frank and Brian- happy to come on the show and share the data!

    Rob July 22, 2016 10:57 am Reply
  • I would like to see more statistics on these programs as to their default rate. Per Rob’s comment above there are more moving parts to these programs. However, in working with REO’s I am surprised at how often I have seen the same home sold through a DAP program foreclosed on as many as three times. One can go into our county records and research the prior mortgage. I always look at history on a property and research my inventory. Interestingly some of the houses have gone through multiple foreclosures without being in any program. Do houses have bad karma? Hmmm. As for a celebrity hack. I am a celebrity. Just ask me. ; )

    REORealtor1 July 23, 2016 5:12 am Reply
    • Happy to share the data. Let me know where to send it.

      Rob July 23, 2016 8:13 am Reply

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