GET UP TO $100 OF FREE CRYPTO: Trade Bitcoin, Doge, and other crypto with low fees on FTX. Use my referral code GRAHAM: https://ftx.us/partners/graham - Enjoy! Lets talk about the new Zero Down Mortgage Program - Add me on Instagram: GPStephan
GET YOUR FREE STOCK WORTH UP TO $1000 ON PUBLIC & READ MY THOUGHTS ON THE MARKET - USE CODE GRAHAM: http://www.public.com/graham
Trade Bitcoin, Doge, and other crypto with low fees on FTX. Use my referral code GRAHAM and get up to $100 FOR FREE: https://ftx.us/partners/graham
GET MY WEEKLY EMAIL MARKET RECAP NEWSLETTER: http://grahamstephan.com/newsletter
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://the-real-estate-agent-academy.teachable.com/p/the-youtube-creator-academy/?product_id=1010756&coupon_code=100OFF - $100 OFF WITH CODE 100OFF
THE NO MONEY DOWN MORTGAGE:
This was launched as a brand new pilot program for first-time home buyers, that aims to help underserved neighborhoods in “designated markets throughout Charlotte, Dallas, Detroit, Los Angeles, and Miami.” This would allow individuals and families to obtain an affordable loan, with no money down, no PMI, no closing costs, and no minimum credit score.
Now, even though these loans ARE intended to help underserved neighborhoods, eligibility is based entirely income and home location, with prospective buyers being required to complete a “homebuyer certification course” prior to applying. This means, ANY first time buyer is able to apply as long as the home falls within the approved zip codes.
On the surface, it doesn’t appear to have many of the “Red Flags” that were associated with the 2008 Housing Crash:
Even though homeowners are putting NO MONEY DOWN, with NO CLOSING COSTS, and NO PMI…they are NOT getting variable interest rate loans, which, arguably - is where a lot of initial trouble started.
Second, it’s currently a pilot program within select zip codes of certain cities…so, even though ANY first time home buyer can apply who meets the eligibility requirement, it’s not prolific enough to affect real estate prices on a large scale.
Third, when people hear “NO MINIMUM CREDIT SCORE REQUIRED TO BUY A HOME," it’s shown that - by including phone and utility payments - lenders can get a similar risk model and default rate, to calculating credit cards and loan payments - so, it makes SENSE to include alternative data to give people loans who OTHERWISE would not have qualified.
And fourth, unlike 2005’s “NO INCOME, NO JOB, NO ASSET” loans, Bank of America IS looking at income history, employment, and current assets to determine eligibility.
HOWEVER… the issue that I see in all of this, is that - offering NO MONEY DOWN mortgages, at a time where median prices are at an all time high - exposes the buyer to A LOT of risk in the event the market goes down, they lose their job, or - their income declines.
In those scenarios, it’s HIGHLY UNLIKELY that they’ll have enough equity to be able to sell their house, WITHOUT coming out of pocket a significant amount of money...and, essentially “locking them” into fixed monthly payments without a clear path out.
Obviously, this presents a SUBSTANTIAL RISK that - most likely, the person who’s putting no money down, is NOT going to be able to come out of pocket to sell, IN THE EVENT something unexpected happens and the market declines - and, unless prices keep going up - they’ll be “stuck” making the payments on their home, whether or not they can financially afford it.
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice. Public Offer valid for U.S. residents 18+ and subject to account approval. There may be other fees associated with trading. See Public.com/disclosures/
GET YOUR FREE STOCK WORTH UP TO $1000 ON PUBLIC & READ MY THOUGHTS ON THE MARKET - USE CODE GRAHAM: http://www.public.com/graham
Trade Bitcoin, Doge, and other crypto with low fees on FTX. Use my referral code GRAHAM and get up to $100 FOR FREE: https://ftx.us/partners/graham
GET MY WEEKLY EMAIL MARKET RECAP NEWSLETTER: http://grahamstephan.com/newsletter
The YouTube Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://the-real-estate-agent-academy.teachable.com/p/the-youtube-creator-academy/?product_id=1010756&coupon_code=100OFF - $100 OFF WITH CODE 100OFF
THE NO MONEY DOWN MORTGAGE:
This was launched as a brand new pilot program for first-time home buyers, that aims to help underserved neighborhoods in “designated markets throughout Charlotte, Dallas, Detroit, Los Angeles, and Miami.” This would allow individuals and families to obtain an affordable loan, with no money down, no PMI, no closing costs, and no minimum credit score.
Now, even though these loans ARE intended to help underserved neighborhoods, eligibility is based entirely income and home location, with prospective buyers being required to complete a “homebuyer certification course” prior to applying. This means, ANY first time buyer is able to apply as long as the home falls within the approved zip codes.
On the surface, it doesn’t appear to have many of the “Red Flags” that were associated with the 2008 Housing Crash:
Even though homeowners are putting NO MONEY DOWN, with NO CLOSING COSTS, and NO PMI…they are NOT getting variable interest rate loans, which, arguably - is where a lot of initial trouble started.
Second, it’s currently a pilot program within select zip codes of certain cities…so, even though ANY first time home buyer can apply who meets the eligibility requirement, it’s not prolific enough to affect real estate prices on a large scale.
Third, when people hear “NO MINIMUM CREDIT SCORE REQUIRED TO BUY A HOME," it’s shown that - by including phone and utility payments - lenders can get a similar risk model and default rate, to calculating credit cards and loan payments - so, it makes SENSE to include alternative data to give people loans who OTHERWISE would not have qualified.
And fourth, unlike 2005’s “NO INCOME, NO JOB, NO ASSET” loans, Bank of America IS looking at income history, employment, and current assets to determine eligibility.
HOWEVER… the issue that I see in all of this, is that - offering NO MONEY DOWN mortgages, at a time where median prices are at an all time high - exposes the buyer to A LOT of risk in the event the market goes down, they lose their job, or - their income declines.
In those scenarios, it’s HIGHLY UNLIKELY that they’ll have enough equity to be able to sell their house, WITHOUT coming out of pocket a significant amount of money...and, essentially “locking them” into fixed monthly payments without a clear path out.
Obviously, this presents a SUBSTANTIAL RISK that - most likely, the person who’s putting no money down, is NOT going to be able to come out of pocket to sell, IN THE EVENT something unexpected happens and the market declines - and, unless prices keep going up - they’ll be “stuck” making the payments on their home, whether or not they can financially afford it.
My ENTIRE Camera and Recording Equipment:
https://www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice. Public Offer valid for U.S. residents 18+ and subject to account approval. There may be other fees associated with trading. See Public.com/disclosures/
whats up gram it's guys here?? 😭😭
Graham doesn’t have work out his arms because he moves them so much when he talks.
time to short housing market XD
What if I get a $200,000 loan from Bank of America and I can buy 20 homes at $10,000 each in different cities all across the US is it going to matter how high the interest rate goes?😅
Did he say "what's up Graham this is Guy's here" ??
Want to improve lower income families? Redistrict the schools tax zones. Let the rich white neighborhoods dip into the poorer multi family minority neighborhoods. Share the money that educates our youth. Instead of white neighborhoods that hog the money for their school districts.
"What's up Graham, it's guys here", might go unnoticed..😂
Super funny intro. Had to hear it three times. Lol
Lol lies
That's exactly what going to happen another 2008 housing bust. I'm surprised your just mentioning this now I have heard people talk about it for sever weeks.
You know a crash is coming when yt starts suggesting meet Kevin and graham stephen 😂
Why say what’s up Graham it’s guys here. I don’t get it. Odd as f
Good video. I think this is a very good thing to a point. I love how it can help people buy a house but it sucks that if a person is underwater and they sell but that under water sell could give someone else that can't afford a house at the normal price to have a better chance at buying a place.
I know people that can afford monthly payment but their problem is trying to get money together for the down payment in a reasonable amount of time so underwater sales can be a good thing for them
This niggga got 4m follows – been here since he had 109 k – congrats my nigga
So I guess
If I’m
White and want a house in ( not the ghetto )
I won’t get approved
Hmmmm
I swear white people are all so racist
Bank of America gets a massive tax payer bailout for writing bad loans then immediately starts doing terrible loans again.
I mean they never really went away though
No more property for you Graham and chips. From today.
What do you say at the begining of your videos? Whats up gram is guy in here?
The solution for expensive housing is not to give more people riskier credit. That just makes houses more expensive as more people bid. Instead, we need to build more houses.
what if they just want to buy the home to own, and not sell. then it should be okay
This genuinely feel like a trap that would leave the most vulnerable holding the bag when the market goes sideways.
I’m not sure this is a move that banks would even do if they weren’t seeing that this might be the top of the market.
do you know at the beginning you said “what’s up gram it’s guys here” ?
Will be interesting to see what happens here in South Africa. Let's wait and see…..
Great video! I personally am very interested in the program if it were to come to upstate New York, but I fear I would be disqualified by income being to high
Want to cheer this guy on and thumbs up for pointing out predatory lending until…he rolls in the Bitcoin promotion…the contradiction is baffling to me…
Just got my RE License and these videos always give me a little insight into what I'm getting into, always informative keep it up!
This happened before way back in the 90s and didn't end well for lender after they were sued (forgot the name). The lender tried using location-based lending qualifications, disproportionally disqualifying minorities or not even offering loans to minority neighborhoods (because those didn't qualify). Providing a test can also imply discrimination. This practice is supposed to be prohibited by fair lending laws so not sure how they get around it.
So, more bailouts soon to come.
Did he say what's up Graham it's guys here????
Tax payer $$$ bailing the banks out again
If you have an institution who sells their loans and don't keep them in their Portfolio. You're at risk of your interest not being satisfied. You have an institution looking to stimulate their cash flow. Knowledge is power, good information.
I think the downside you explain is an inherent risk of buying a home in this market, regardless of the bank the buyer chooses. The biggest risk from taking on this loan program is the interest rate or any hidden terms the buyer may be unaware of.