The disappearance of down payment assistance

no down payment

BrokerIPTV: Today we are talking with Chip Allen branch manager with Lakewood Residential Mortgage a division of Universal Lending, welcome of the show.

Chip Allen: Good to be here Dan.

BrokerIPTV: Alright, let's get into mortgages. Some standards that people should be thinking about that that they are going to need to qualify for to get a loan. Whether it's the first time buyer, a second time buyer, for instance you can't get by these days without a down payment anymore.

Chip Allen: Dan, it's pretty tough without a down payment. We still have some pretty good none seller funded down payment assistance programs, good examples of that are CHAC and HOAP. These are people with lower incomes but the good ol' days of seller funded down payment assistance at this point is gone. It may be coming back, HUD doesn't particularly care for the program's understandably a lot of people in Congress do. I personally think with seller funded down payment assistance this can be a very good program to help move a lot of the inventory with some common sense requirements. <watch video>

BrokerIPTV: So someone who's calling you, ringing your phone for the first time you're going through kind of a checklist and saying, currently where's your credit at? Are we in the six hundreds? Currently do you understand that you are going to need to go full document probably.

Chip Allen: Correct

BrokerIPTV: Currently you're going to need a down payment of at least three percent and what are some of the other factors that we're running down the list?

Chip Allen: Well, first thing I like to do to see exactly where they're at on their credit score. Consumer generated credit reports aren't particularly reliable. I like to analyze the credit report to see if there's any erroneous information on there. Um, I like to see how long they've been on the job, ask them questions like that and one of the things that I really like to approach, what housing payment do you feel comfortable with? As opposed to what do you qualify for, and I think that's real important. I've always believed you want to see somebody be house poor. Ok, so when I'm talking to people, here's the maximum that you qualify for. Talked to some nice folks last week, technically they qualified, sixteen hundred a month payment. They didn't feel comfortable much over twelve hundred. So we kind of based things off that. Um, need to make sure that they do have the down payment money and of course it is soureceable. We can show where it came from.

BrokerIPTV: What happens next to stabilize this industry?

Chip Allen: I think it's going to come down to the elections. People are going to let out a big sigh of relief. We know one way or the other, no matter what your politics are, which direction the country is headed. Um, there's a lot of things that I think are going to help, people need to live somewhere, they can either make a landlord rich or themselves rich. The seventy five hundred dollar tax incentive plan is attracting a lot interest. HUD for example has a program, owner occupant where you can come in with a hundred dollars. Owner occupant, you got to live there. I think everybody's holding their breath because the elections and we're going to start to go forward after that.

BrokerIPTV: Chip, great information thanks for being with us.

Chip Allen: Thank you.

BrokerIPTV: Appreciate it.

Chip Allen with Lakewood Residential Mortgage on the state of the mortgage industry

Posted on November 21, 2008 11:58:55 by Blog Author