Zero Down Subprime is BAAAAACK!

Thousands line up for zero-down-payment, subprime mortgages

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Funny the CNBC story was at Miami, where the stripper from Big Short loaded up on condos. :smile:

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They said NACA receives a 3k commission on each loan. Where does the 3k come from? The borrower puts nothing down. Also with no mortgage insurance if housing prices go south like I think they might, it could be a big mess.

The 3k comes from lender, which in turn is amortized into borrower’s loan.

So they are going to owe 3k more than the value of the property plus around 7k in closing costs. 10k underwater already.

Is NACA underwriting criteria similar to a regular mortgage except lower credit score?

I don’t understand why they can offer a lower interest rate than a regular mortgage.

Oh, so it’s a subsidized program most of us are not eligible. But if it’s not too difficult to get such a loan, I think the competition to get a NACA mortgage might be fierce due to limited funding.