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Wells Fargo Peddling Down Payment Assistance Crack

By gregpfielding   2012 Nov 28, 8:24am   859 views   2 comments   watch (1)   quote      

Wells Fargo is now peddling down payment assistance crack to potential FHA home buyers in Oakland, Fremont, Hayward, Concord, Antioch, Bay Point, Brentwood, Pittsburg and Richmond – areas that have been hardest-hit by foreclosures.

...

The Wells Fargo “gift” has a few strings attached, primarily that it’s only free money after five years of never being late on a payment. I would assume that you couldn’t sell the property for five years without paying the down payment “gift” back either.

Wells Fargo has no-doubt crunched the numbers and concluded that, even with the expected default rates and losses accounted for, they would still make money overall on the program.

The main problem is that, simply put, if you can’t save up 3.5% of the purchase price, you probably can’t really afford the house and all of the extra costs associated with ownership. Just like with Nehemiah and the other defunct programs, buyers will be encouraged to get into huge debts that they probably can’t really afford. Some of these stories will have happy endings, but many will end badly.

http://bayarearealestatetrends.com/2012/11/28/wells-fargo-peddling-down-payment-assistance-crack/

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1   bmwman91     2012 Nov 28, 8:47am  ↑ like   ↓ dislike   quote    

SFace says

It's a legal settlement _umbass

It's a pretty damn good one, too. For WF. They have a great way to get some number of people to borrow up to $80k more money from them, to pay back with interest. Not a bad punishment!

2   gregpfielding     2012 Nov 28, 9:10am  ↑ like   ↓ dislike   quote    

Updated and Corrected.

The CityLIFT program is a part of the broader settlement (something not mentioned in the Tribune article). But the issue still remains that this is a pretty lousy use of settlement funds.

Actually, a pretty damn immoral one.

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