From the Investor's Business Daily:
Fannie Mae Rolls Out Easy Mortgage, Catering To High-Risk Immigrants
Subprime 2.0: The White House is rolling out a new low-income mortgage program that for the first time lets lenders qualify borrowers by counting income from nonborrowers living in the household. What could go wrong?
The HomeReady program is offered through Fannie Mae, which is now controlled by Obama's old Congressional Black Caucus pal Mel Watt. It replaces the bankrupted mortgage giant's notorious old subprime program, MyCommunityMortgage.
In case renaming the subprime product fails to fool anybody, the affordable-housing geniuses in the administration have re-termed "subprime," a dirty word since the mortgage bust, "alternative."
So HomeReady isn't a subprime mortgage program, you see, it's an "alternative" mortgage program.
After the catastrophe of 2007, I hope they will be a bit more careful in issuing these loans:
At least before the crisis, your income had to be your own. But now, as a renter, you can get a conventional home loan backed by Fannie by claiming other people's income. That's right: You can use your apartment roommate's paycheck to augment your qualifying income. Or your abuela.
You can even claim the earnings of people who are not occupants, such as your parents, under this program.
And:
You don't need good credit either. You can qualify with a FICO credit score as low as 620, which is subprime. And you can put as little as 3% down.
And of course:
Fannie and its regulators say, don't worry — this new program won't introduce any undue risk into the mortgage-finance system.
And this:
Most troubling, Wells Fargo and other big mortgage lenders have already signed on. More will soon follow as the program rolls out in a big way through Fannie's automated underwriting system later this year.
The stupid - it burns! It was just this kind of idiocy that caused the financial meltdown of 2007 and 2008 - the one we are just starting to recover from. Now they want us to go through it again?
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