[CSM]

This doesn't seem any different to me than the current situation. FHA offers "no downpayment" loans, but still require the borrower to pay closing costs. They are also considered high risk and the interest rates reflect just that. I don't understand how this is different....

In addition, the federal garuntee is for the amount of the loan that isn't recovered by the lender after the foreclosure and sale. If a $100K loan is defaulted on, and if the market value is $115K, the bank can sell the home for $100K and give someone a good deal while covering the loan and the feds don't end up paying anything.

I just don't see how this is new.

BTW, I bought my home on a "no down payment" VHA loan. 4 years later I had enough equity to refinance at a lower interest rate and cash out some equity for student loan consolidation.......

[Dane]

You just had to be a stick in the mud(reply #31) for a good knee jerking thread for the malcontents on FR. :^)