from strings attached, it seems like the gov. is

doing massive business. From borrrow's point of view, he can keep living in the house but his future property appreciated is limited or even capped (similar selling a covered call for stocks). It does not seem to help lender too much either since it requires lender to write down another 10% relative to current market price. The Gov. itself seems like the most beneficial one in this massive business. Gov. claims to rescue people while it tries to make money. The most beneficial ones might be the new buyers who are those gov. "helped" neighbors. I am sure there will be a lot of frauds in this messy practice.



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What does it cost?
There should be little up-front costs for borrowers to bear. Loan origination fees will vary by lender, but these can usually be paid by the borrower over the life of the loan in the form of a slightly higher interest rate.

However, the refinanced loans do come with many strings. For one thing, borrowers are responsible for paying an insurance premium to the FHA guaranteeing the loan, which will be 1.5% of the principal annually.

Borrowers also agree to share any profits from future home-price appreciation with the FHA. To do that, they'll pay a "3% exit fee" of the mortgage principal to the FHA when they resell or refinance.

Plus, they'll agree to pay the FHA 100% of any profits they realize from higher home prices if they sell or refinance within a year. So if the original loan principal is $200,000 and the home sells for $250,000, the borrower will owe the FHA $50,000, minus costs.

After a year, borrowers will share 90% of the profits with the FHA. The percentage keeps dropping in 10% increments to 50% after the fifth year, where it stays.

所有跟帖： 

• exactly. FHA get limited downside and unlimited upside. -729418- ♀ (0 bytes) () 07/24/2008 postreply 13:46:05

• ped, can you share your thoughs on "The most beneficial ones -kitten- ♀ (74 bytes) () 07/24/2008 postreply 13:50:01

• typo: thoughts not "thoughs" -kitten- ♀ (0 bytes) () 07/24/2008 postreply 13:51:24

• 回复：ped, can you share your thoughs on "The most beneficial ones -pediatrician2- ♂ (214 bytes) () 07/24/2008 postreply 13:53:17

• Got your point. Thanks so much! -kitten- ♀ (0 bytes) () 07/24/2008 postreply 14:07:06

• This is a completely wrong statement. Please don't mislead peop -miat42- ♂ (251 bytes) () 07/24/2008 postreply 14:10:12

• can you read English? -pediatrician2- ♂ (145 bytes) () 07/24/2008 postreply 14:14:53

• If you don't write clear English, can you blame the readers? -miat42- ♂ (122 bytes) () 07/24/2008 postreply 14:24:39

• where? -pediatrician2- ♂ (309 bytes) () 07/24/2008 postreply 14:27:10

• I know to some extent, you will start to use Mxxxx word -miat42- ♂ (179 bytes) () 07/24/2008 postreply 14:34:06

• you do not answer the question. i said you can not -pediatrician2- ♂ (48 bytes) () 07/24/2008 postreply 14:45:37

• One Qs: those rescued homeowners just reset -kitten- ♀ (364 bytes) () 07/24/2008 postreply 14:46:13