sounds like taxpayers, including renters of course, are giving interest free money to homedebtor with no guarantee of pay back. What if a homedebtor get this loan, pay all his/her mortgage associated cost with it while saving all other incomes for 2 years. Then default on his/her mortgage anyway when the maturity date arrives. $25k/year guarantee income is a sizable for some people.
To add more icing, I hear from my friend(no proof) that if the borrower of EHLP can continue paying mortgage on his/her own after 24 months, HUD will take off 10k per year for every year up to the total loan amount. That means borrower does not have to pay back EHLP as long as they keep paying mortgage.
Everything government has done is trying to make sure banks get their money back plus profit in name of keeping homedebtors in their underwater house.
invite response
Here is the link to government's website EHLP, there is not much detail yet. However, one clause catches my attention:
"offer a declining balance, deferred payment “bridge loan†(zero percent interest, non-recourse, subordinate loan)"
sounds like taxpayers, including renters of course, are giving interest free money to homedebtor with no guarantee of pay back. What if a homedebtor get this loan, pay all his/her mortgage associated cost with it while saving all other incomes for 2 years. Then default on his/her mortgage anyway when the maturity date arrives. $25k/year guarantee income is a sizable for some people.
To add more icing, I hear from my friend(no proof) that if the borrower of EHLP can continue paying mortgage on his/her own after 24 months, HUD will take off 10k per year for every year up to the total loan amount. That means borrower does not have to pay back EHLP as long as they keep paying mortgage.
Everything government has done is trying to make sure banks get their money back plus profit in name of keeping homedebtors in their underwater house.
#housing