Friday, March 8, 2013

No Money Down Mortgages

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.

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4 comments:

  1. AnonymousMarch 10, 2013 at 8:47 AM

    How is this serving the undeserved?

    ReplyDelete
  2. AnonymousMarch 11, 2013 at 11:22 AM

    These very big cus will get even bigger, and continue to take members and business from the smaller cus until those get gone. Cooperatively.

    ReplyDelete
  3. AnonymousMarch 12, 2013 at 12:54 PM

    the 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.

    ReplyDelete
    Replies
    1. AnonymousMarch 13, 2013 at 2:42 PM

      Then why do they provide a no money down mortgage to the purchaser of a million dollar home (if they're on food stamps)?
      Credit unions. The poster child of "both sides of themouthspeak"

      Delete

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