Fannie Mae Introduces HomeReady, a Low-income Mortgage Targeting High-Risk Immigrants
We’ve seen this movie before, and it doesn’t end well.
As Reagan once said, “The nine most terrifying words in the English language are: I’m from the government and I’m here to help.” They’re about to destroy our real estate industry again….
With little fanfare, the White House is rolling out a new low-income mortgage program that lets lenders qualify borrowers by counting income from non-borrowers living under the same roof. What could possibly go wrong?
The HomeReady program is offered through Fannie Mae, which is now controlled by Mel Watt, of Congressional Black Caucus fame. It replaces the bankrupted mortgage giant’s notorious old “subprime” program, MyCommunityMortgage.
However, since the word “subprime,” rings with lingering mortgage bust connotations they’ve ditched it in favor of the more gentle moniker “alternative.”
So HomeReady isn’t a “subprime” loan program. Nope, it’s a kinder, more gentle “alternative” mortgage program… but, make no mistake, it’s the same subprime junk Fannie used to fuel the “bust.”
Back in the day before the crisis, at least what little income was deemed necessary for a subprime loan, it had to be your own. But with this crazy scheme, as a renter, you can get a conventional home loan backed by Fannie by claiming other people’s income. That’s right: you can use your apartment roommate’s paycheck to augment your qualifying income. Or that of your “abuela” or “tio” living on the other side of town for that matter.
You don’t need good credit either. You can qualify with a FICO subprime credit score as low as 620. And, you can put as little as 3% down. Does this sound familiar?
Read the story at Investors.com.
photo credit: Sign Of The Times – Foreclosure