New Effort To Bring Back Downpayment Assistance

by Peter G. Miller
August 15th, 2008
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This being the Internet Era, the Nehemiah Corporation of America has created a new web site to get downpayment assistance programs (DPAs) re-instated for FHA mortgage borrowers.

The programs were eliminated under the FHA mortgage reform package passed earlier in the month.

While HUD has long-sought the elimination of the programs on the grounds that they resulted in disproportionate foreclosure levels. Scott Syphax, the president and CEO of Nehemiah Corporation of America, says that HUD’s “own inspector general cited as unreliable. In short, FHA undercounts the number of DPA loans by up to three times and divides that number into the number of claims it pays.”

On October 1st, say Nehemiah at dpagroundswell.org, downpayment assistance will be eliminated.

“As a result, 50,000 hard-working, credit-worthy families will be denied the American dream of homeownership in that month alone. The loss would further injure an ailing economy and fatally injure an already crippled housing market—a housing market in which 40% of all current Federal Housing Authority (FHA) loans depend on DPA.

“A new law, H.R. 6694, has been proposed to fix the error and save DPA. To pass it, we need a groundswell of public support.”

The FHA reform bill included a number of bits and pieces needed to cobble together strong support on Capitol Hill in the face of the President’s threat to veto the measure. Supporters of the bill got their strong majority — but also wound up with a bill which included several provisions which would have been unlikely to pass individually.

Traditionally DPA programs have had broad support on Capitol Hill, reason enough to believe that the legislation could pass — and then face a presidential veto.

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This entry was posted on Friday, August 15th, 2008 at 3:36 am and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

2 Responses to “New Effort To Bring Back Downpayment Assistance”

  1. Thomas Paine Says:
    August 16th, 2008 at 9:55 am

    quote:

    HUD’s “own inspector general cited as unreliable. In short, FHA undercounts the number of DPA loans by up to three times and divides that number into the number of claims it pays.”

    :endquote

    Isn’t anyone checking the math here? This would result in UNDERSTATING the foreclosure rate of DPAs not overstating. Check HUD’s Reading Room on its web site; look under the SnapShot data for originations.

    As you can see, DPA loans are identified with a nonprofit tax ID field of the so called charitable operation that provided the “gift.” If this field is not being filled out by the lender, then the loan would be considered to have a regular borrower provided down payment.

    If such a misidentified loan were to be foreclosed, it would be counted as a foreclosure and claim of a loan involving a borrower provided down payment not a false gift based loan from Nehemiah et al.; thereby leaving Nehemiah’s foreclosure count UNDERSTATED not overstated sheeesh!

    Why do I keep seeing this nonsensical statement being made AND REPEATED without challenge? Is anyone conscious out there?

  2. Cindy Randall Says:
    August 27th, 2008 at 8:46 am

    With whom should be send out comments to, to support this issue?

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