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thetruthfromNC
Flash in the pan


Joined: 19 Nov 2008
Posts: 43

SFDPA
PostPosted: Wed Apr 01, 2009 8:12 pm Reply with quoteBack to top

Why I can't support IM position is because of all the false ideas that put on their site.

1) IRS has never said it was a scam, just that it doesn't qualify as a charity they says it's a for profit entity. FYI, profit companies are not scams, you probably work for one.
2) There is NO fraud involved! Fraud is when one party does not know everything about the transaction. With SFDPA everyone knows the seller is paying the DP (even HUD), it's on the hud-1 for all to see.
3) Buyers don't start with neg equity, learn math first. If a home is worth 97K and the seller increases the price to 100K (to cover DP) and pays 3K and you get a loan for 97K, then you have NO equity not neg equity. And if you sell later for only 97K, you've lost nothing.

My point is, I've learned when any group uses false data BE CAREFUL of their position. If SFDPA was as bad as you say you shouldn't have to give false info.
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Do_the_math
The WhistleBlower


Joined: 14 Mar 2007
Posts: 2564
Location: Groovy Town

Re: SFDPA
PostPosted: Tue Apr 07, 2009 4:58 pm Reply with quoteBack to top

thetruthfromNC wrote:
Why I can't support IM position is because of all the false ideas that put on their site.

1) IRS has never said it was a scam, just that it doesn't qualify as a charity they says it's a for profit entity. FYI, profit companies are not scams, you probably work for one.


Ummm... you would be incorrect. The IRS has formally referred to them as "schemes" and "scams". Read it and weep:

http://www.irs.gov/newsroom/ar.....75,00.html

Quote:
2) There is NO fraud involved! Fraud is when one party does not know everything about the transaction. With SFDPA everyone knows the seller is paying the DP (even HUD), it's on the hud-1 for all to see.


If the purchase price is increased to cover the down payment, its is fraud. That is why purchasers are suing Dominion Homes and Nehemiah. SFDPA was created to circumvent FHA down payment rules and give the "impression" of a down payment by taking the down payment from an unacceptable source, and "laundering" it through a non profit which is an "acceptable source". Although an intermediary is involved does not change the fact that funds for the down payment came from the seller and was included in the price. Aside from the nature of SFDPAs, I've uncovered some issues with the SFDPA firms and excess benefits that raise serious questions.

Quote:
3) Buyers don't start with neg equity, learn math first. If a home is worth 97K and the seller increases the price to 100K (to cover DP) and pays 3K and you get a loan for 97K, then you have NO equity not neg equity. And if you sell later for only 97K, you've lost nothing.


I've done the math, and you are apparently unaware that MIP is typically financed. Hence, negative equity. In a depreciating market- negative equity. The fact that there is typically a cost to sell- again, negative equity. BTW, if the home is worth $97k, and the sales price is increased to $100k to cover the SFDPA contribution, we are back to the issue of fraud.

Quote:
My point is, I've learned when any group uses false data BE CAREFUL of their position. If SFDPA was as bad as you say you shouldn't have to give false info.


I don't give out "false" data and information. If you read my articles, you will find extensive information linked throughout. The links are provided for a reason and that reason is to allow the reader to research the information themselves and arrive at their own conclusions.

On the other hand, most pro-SFDPA articles are mostly fluff and lack the extensive references and details found in my articles. I am not a paid lobbyist and receive no financial enumeration for my work- in fact, all I have received is liability. If you still find the SFDPA organizations that have millions at stake more reliable, more power to you. Wink

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Randall
Batman


Joined: 19 Oct 2007
Posts: 720
Location: Orange County, California

Re: SFDPA
PostPosted: Tue Apr 07, 2009 5:29 pm Reply with quoteBack to top

thetruthfromNC wrote:
Why I can't support IM position is because of all the false ideas that put on their site.

1) IRS has never said it was a scam, just that it doesn't qualify as a charity they says it's a for profit entity...


Hmmmm...

Read this headline:
IRS Targets Down-Payment-Assistance Scams; Seller-Funded Programs Do Not Qualify As Tax Exempt

Now take a close look at the web site it came from:
http://www.irs.gov/newsroom

I honestly did not write or reply to your post to change YOUR mind, but readers should be aware of the truth.

No matter how many times you say the words "IRS has never..." it just doesn't fly in the face of the evidence presented here.

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Randall
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phillips65020
Dud?


Joined: 16 Oct 2008
Posts: 6

Re: SFDPA
PostPosted: Sat Apr 11, 2009 2:06 pm Reply with quoteBack to top

[quote]1) IRS has never said it was a scam, just that it doesn't qualify as a charity they says it's a for profit entity. FYI, profit companies are not scams, you probably work for one.

Ummm... you would be incorrect. The IRS has formally referred to them as "schemes" and "scams". Read it and weep:

http://www.irs.gov/newsroom/ar.....75,00.html
Quote:



I don't have empirical data like many of you have. I'm pretty busy originating good loans for a great Bank.

What I DO know is that I have seen mortgage brokers exploit lending programs and seller funded down payment programs. I believe the reason why FHA backed down their cash out LTV to 85% was because brokers were exploiting that very aspect of the FHA program. And I support the decision. When subprime & AltA went away, brokers had nothing to exploit, so they turned to FHA. When you have no brand or capital to protect, unethical conduct will ensue.

Seller funded down payments are a good thing when you have a banker and ethical appraiser working on the deal. The truth comes out regarding value & the seller truly gives up profit to put a deal together. That part of SFDPA works... period. HVCC will go a long way of helping with this issue as well. HVCC is not perfect, but it rids the brokers of the ability to choose their MAI (Made As Instructed) appraiser.

Say all you want about scams or fraud. It only exists because of the few (brokers). And as you can see, the mortgage broker is dying a slow death. Rightfully so. Because, Friends... that's where the exploitation & fraud was coming from.

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