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Stop “FHA Subprime” – Defeat HR 600 and SFDPA

http://ml-implode.com/sfdpacampaign.html

STOP HR 600: STOP 'FHA Subprime!'While flying the flag of “helping” would-be homebuyers in lower income brackets, “seller funded downpayment assistance” inflates the home price via “laundering” a downpayment from seller to buyer in order to get the homebuyer in an FHA approved loan. This process instantly puts the house into negative equity.

Not surprisingly, “SFDPA” is very profitable in fees to the companies who make it possible while stacking the cards against the “assisted” homebuyer, who research has shown, is considerably more likely to go into foreclosure.

As if putting homebuyers into instantly underwater homes that are much more likely to go into foreclosure under the “auspices” of helping them out wasn’t bad enough, when the loans default, they dump back onto the FHA and thereby the taxpayer.

So who wins in this mess of “charity?” The companies lobbying for its re-legalization via H.R. 600.

And if H.R. 600 gets passed, let there be no doubt, our elected officials have learned nothing from the credit collapse.

More on Seller Funded Downpayment Assistance and HR 600 at ML-Implode.com:

This practice has been criticized or ruled against by the FHA, the GAO, the IRS, the FBI, and even US Congress itself, which outlawed it (for the time being) in the 2008 Housing Bill. Yet those who profit off the practice are trying to revive it.

So What is it??

The contentious practice is called “seller-funded downpayment assistance” (SFDPA). It is used to allow home buyers getting Federally-backed mortgages to bypass the need for a downpayment, supposedly for charitable reasons.

On the surface, it sounds benign, but it is actually fraud and money laundering inflicted on the Federal Housing Administration (that is, taxpayers), the housing market in general, and in a sense, even the buyers!

One of these companies, Global Direct Sales (which runs the “Grant America Program”) has sued us in an attempt to stop us from revealing the existence of SFDPA and discussing it frankly. SO FAR A FEDERAL JUDGE HAS BLOCKED THEIR ATTEMPTS TO SILENCE US. (Read More about our battle here. Help us to fight this NUISANCE lawsuit which is a blatant attack on free speech!)

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The Great Inflation Moderation that Wasn’t

http://themessthatgreensp…that-wasnt.html

Tim Iacono of The Mess that Greenspan Made consistently puts out some of my favorite charts, and has been doing so for as long as I remember (back before I was even blogging at autoDogmatic!). Anyway, his latest post is fantastic because it really attacks a huge misconception regarding the period of prosperity attributed to Greenspan known as the “Great Inflation Moderation.”

In particular, I love his chart below on Interest Rates and Existing Home Prices. I don’t know what was going on prior to 1980, but look at that inverse correlation!

And some quotes:

There are no real surprises below – a big run-up in prices as interest rates were moving lower over the last 25 years with a major price correction at the end that still has a little way to go.

It is through lower mortgage rates that dimwitted economists have sought to rationalize the dramatic rise in home prices over the last few decades, most of them thinking that everything was hunky-dory right up until the housing bubble burst in 2005-2006.

It’s no coincidence that, after the events of the last eighteen months, very few now see what was once glowingly called the “Great Moderation” as a permanent shift.

As far as price signals go, it was more like the “Great Muffling”.