So nationwide, these low down payment sales, like the subprime of old, are already coming back to bite the hand that fed them.
The MBA stated that an increase in mortgage insurance premiums for FHA loans, which are attractive to buyers because of their low down payment requirements, may have contributed to this decline.
Some may still be able to obtain an FHA loan with a low down-payment requirement, but those with poor credit will likely have to put a larger amount down.
FORBES: Down Payment on Home Out of Reach for Half of U.S., Poll Finds
Last month, Democrats introduced a bill designed to increase federal loan limits in expensive states like New York and California, as well as expand the number of zero- and low-down-payment loans FHA offers.
It cannot just be assumed that most people who during the housing boom bought homes with adjustable-rate mortgages, or mortgages with prepayment penalties, or mortgages that required a low or even no down payment, were fools or victims of fraud.
Layering of risk means the borrowers courted by these lenders had multiple characteristics that would put them at high risk for default, including no down payment, no documentation of income or assets, low credit scores and second mortgage in lieu of a down payment.
The award-winning Police Homeowner Loan Program offers police officers low-interest (4%), short-term (20 year) financing with no down payment for the purchase of rehabilitated houses in low-income, inner-city neighborhoods in Columbia.
Too many people were granted too many mortgages with too little down payment, at too low of interest rates.
While down, the late-payment rate is above historically low levels.
With the new laws passed in the Dodd-Frank financial overhaul bill last year, the holder of a low credit score is really shut out of the market today unless a large down payment can be ponied up.
Many buyers trying to break into the market while prices are low are already scraping the bottom of their savings account barrels to come up with their down payment money.
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