Mortgage Chili – Is DPA… DOA? Should it be?

OMG! Now what.

First the gov’t takes away down-payment assistance and now it wants to give it back?

Honestly, I have mixed emotions about this.

One one hand, it could be the shot in the arm that the housing market needs. Right now the industry is teetering on the influx of the First-Time Home Buyers. Move up buyers can’t move until the FTHB buys their home and the Dream home buyers can’t move up until the move-up buyers buy their home.

In essence that first domino must fall… butttttttt, at what cost?

The downside of the DPA programs is that the default rate on those loans was over 300% higher… don’t fool yourself… this does effect everyone in the end and might have more to do with our current situation than may be able to be measured.

I guess, being intellectually honest, the reimmergence of DPA, if in fact it makes it through all the hoops, may be a mixed bag at best.

Sure, having the new folks enter into the marketplace is necessary, but what is the long-term cost??

My advice to those that are reading this and may personally benefit from the new DPA, please do not let some smooth-talking mortgage professional… uh person… get you in over your head.

The future rests on it, and only time will tell.