July 15, 2024

New Home Loan Test Program

As the US housing bust continues and actually has a high probability of accelerating in 2023, there are still many people who believe this downturn is not going to be anything like it was in 2008.

New Home Loan Test Program - San Diego 4Br. home for sale

Their main rationale for this is that they believe it’s much harder to qualify for home mortgage loans now.  Quite different from around 2008, when loan mortgage qualifying criteria were extremely lax. Actually, around that time I think the term ‘liar loan’ was coined. Yes, you could pretty much say that you are a neurosurgeon making $250,000 a year and get your home mortgage loan approved without any real verification.  Well, maybe that’s true, or perhaps a slight exaggeration, but in any case loans were very easy to qualify for back in 2008.

New Home Loan Test Program

News has just come out that Bank of America has just launched a new test home mortgage plan in four different cities.

New Home Loan Test Program - San Diego real estate market

From what I understand, the plan is aimed at minority communities within these four (Los Angeles, Dallas, Detroit and Charlotte) cities.  In an effort to help minorities purchase their first home, this program offers home mortgage loans without any down payments, closing cost,  or the necessity of getting private mortgage insurance!

Well, this test program also does not require any minimum credit score.  Instead, the qualifying will be based on the applicant’s payment history of rent and utility bills.  The pilot program does require that applicants must first finish a homebuyer certification program where they’ll learn about the responsibilities and obligations of homeownership.

Although many may think that this program is a great stepping stone for minority homeownership, I think the rollout timing of it pretty much ensures a huge foreclosure rate.  Personally, I feel that offering this program without any down payment is the first big mistake. I think it’s critical that any homeowner have some skin in the game.  The second big mistake, is offering this program without any minimum credit score criteria. And lastly, as we accelerating into a very real real estate downturn, the timing of this program couldn’t be worse.

Let’s say that people who take advantage of this pilot program in the first half of 2023, find out in December of 2023 that their home value has now dropped by 5, 10 or $20,000.  The fact that the program requires no down payment, seems to encourage people who may fall into this situation, just a walk from their properties.  After all, what do they really have to lose?

Now if Bank of America is offering this on their own without Federal subsidies, they certainly have that right, and I wish them good luck, but I’m sure glad that I’m not an owner of their stock!  Now, if the program is being subsidized somehow by the Federal Government, in my opinion it would be a complete waste of taxpayer monies.

New Home Loan Test Program


  • Brokerforyou.com is for SALE

    Just like most major businesses, the easiest way, and the fastest way to expand your business and influence in your particular market is through strategic acquisition. Just look at Google, they are the number one search engine in the world! Google bought Youtube in November 2006 for US$1.65  billion! YouTube now operates as one of Google’s subsidiaries.

    www.brokerforyou.com is for sale and is offered with a very popular San Diego residential real estate channel with 1.16K subscribers and 114 videos!!

    What’s the approximately monthly cost to host a website?  With shared hosting, you’re hosting fee can break down to about 10 to $15 per month. To keep your url registered (that’s your site address), this is usually paid on a five to 10-year basis, which averages out to about just a dollar per month!  Naturally, if you add direct hook-up to a MLS database, that provides lead capturing, this costs can vary greatly from provider-to-provider.

    Interested, call Bob Schwartz (619) 286-5604 for additional information

  • #######

    home water leak detector – https://flumewater.com?grsf=w79pta

    home water leak detector


    Great DRONE Value 

    Drone Value


    Some of the links in this description and in our videos may be affiliate links, and pay a small commission if you use them. I really appreciate the support.

    The content in my Youtube videos SHALL NOT be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other & may be outdated or inaccurate; it is your responsibility to verify all information. I am a not financial adviser. I only express my opinions based on my experiences. Your experience may be quite different. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. You must conduct your own research. There is NO guarantee of gains or losses on any investments.

    My produced videos are for entertainment purposes ONLY. DO NOT make buying or selling decisions based on these videos. If you need advice, please contact a qualified CPA, attorney, insurance agent, contractor/electrician/engineer/etc., financial advisor, or the appropriate professional for the subject you would like help with. Linked items may create a small financial benefit for me.