Because the investors who are the ultimate source of the money being loaned out in the mortgages believe that the buyers are having to put some money down, but in fact they are not, this is simply a fraud on the investors.
A better way to look at it is that the buyer inflates his price(profit) at the expense of the mortgage investor who believes that the sales price is a arm's length transaction at market.
A friend's sister just bought a new $1.3M house from a builder, after the builder offered to pay $130K cash into the loan if they used the builder's lender. I don't know if it was arranged to be a third-party thing, and I don't know what median price means under these conditions, but I can spell distortion....
The quote from David Ledford is telling and, in New Jersey at least, inaccurate. I work for a non-profit in the affordable housing industry and no reputable builder or advocating/providing agency uses them.
They are a straight-up scam, and one that is not even hard to see, the "non-profits" own explanation of the process on their websites make it clear this is a fraud on the homebuyer and the mortgage lender.
What, giving the buyer the dp and jacking the price to account for that is a scam? Buncha IRS commie bastards.
Commie bastards? Nah, National heroes. The buyer is the commie bastard.
Because the investors who are the ultimate source of the money being loaned out in the mortgages believe that the buyers are having to put some money down, but in fact they are not, this is simply a fraud on the investors.
A better way to look at it is that the buyer inflates his price(profit) at the expense of the mortgage investor who believes that the sales price is a arm's length transaction at market.
I thought you might enjoy a recent piece that I wrote on this subject.
This has always been one of those programs that everyone knew was a scam. I am glad to see that it finally is exposed to the light of day.
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A friend's sister just bought a new $1.3M house from a builder, after the builder offered to pay $130K cash into the loan if they used the builder's lender. I don't know if it was arranged to be a third-party thing, and I don't know what median price means under these conditions, but I can spell distortion....
The quote from David Ledford is telling and, in New Jersey at least, inaccurate. I work for a non-profit in the affordable housing industry and no reputable builder or advocating/providing agency uses them.
They are a straight-up scam, and one that is not even hard to see, the "non-profits" own explanation of the process on their websites make it clear this is a fraud on the homebuyer and the mortgage lender.