Two Washington, D.C.-area credit unions, NASA FCU and Navy FCU, have been advertising no down payment mortgages with no Private Mortgage Insurance.
NASA FCU will provide 100 percent financing for for a primary residence purchase up to $650,000 in DC, Maryland, and Virginia.
Navy FCU will provide such financing arrangements up to $1 million.
In a story in the Washington Post, Navy FCU stated about 11 percent of its mortgages did not require a down payment.
While I don't know the underwriting standards used by the two credit unions, no down payment loans with no Private Mortgage Insurance are potentially risky, as the borrower has no skin in the game.
A colleague once made this observation -- borrowers who make no down payments are renters with debt.
How is this serving the undeserved?
ReplyDeleteThese very big cus will get even bigger, and continue to take members and business from the smaller cus until those get gone. Cooperatively.
ReplyDeletethe last time I looked, many if not most of our armed forces qualify for food stamps and that puts them in an underserved catagory as far as I am concerned. Navy may be the biggest credit union in the world but IMHO they serve their members better than most credit unions would.
ReplyDeleteThen why do they provide a no money down mortgage to the purchaser of a million dollar home (if they're on food stamps)?
DeleteCredit unions. The poster child of "both sides of themouthspeak"