I guess I am dense. I thought that the 100% finance loan were suspended. Yet I had this type loan flier placed in my office in-box touting 100% financing with as little as $500.00 down. We are still reeling from the effects of a sluggish market with buyer confidence at a low point. Considering the recent record number of mortgage companies who went under is there a reason that this practice is still popular? It this not a bad idea twice?
We should have gotten the message that when buyers have no equity coming into a home and given the fact that most were not in a position to negotiate for a 20 or 30 year fixed rate, the pattern would repeat itself. Since we agents cannot be fortune tellers with a crystal ball or tarot cards to predict the amount of appreciate or depreciation a property can expect over a few years; would it not make sense to stress that homeowners have enough reserves to not only make a sizable down-payment, but be self-sufficient for 6 months prior to committing to this obligation?
Red Faced in Redding!
*This is only my opinion and observation. I only rely on common sense and what I see. So if you know the reasoning behind this I sure want to know....
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