“(An employee of) BB&T writes, “Speaking of low down payment loans for first timers- As part of their CRA requirement, BB&T Bank offers a 97% LTV conventional loan with no PMI called CHIP: “Community Homebuyers Incentive Program.” All of the 3% down payment can be a gift. They lend to borrowers who are at or below 80% of the median income for their area, and will go down to a 620 credit score…

…The maximum debt ratio is 43%. Borrowers are required to take a homeownership educational course. BB&T offers this program through its retail channel only and within the Bank’s footprint which stretches from Texas to Maryland along the east coast.””, Excerpt from May 13, 2014, Mortgage Industry Newsletter

“Given the housing and mortgage crisis we are just emerging from, I don’t think this program makes any sense at all, do you? It seems to me, little of substance (I think most of the CFPB stuff is form over substance.) has really changed and we are already repeating the mistakes of the very recent past. If we have another housing bubble/bust, in my view this BB&T mortgage program will default at very high rates; similar to the levels of subprime and FHA mortgages originated in 2007- 2011. Also, doesn’t this directly prove that government-imposed CRA lending requirements were a major cause of deteriorating mortgage lending standards? (See related blog Statements #86 and #113)” , Mike Perry, former Chairman and CEO, IndyMac Bank

 

Posted on May 13, 2014, in Postings. Bookmark the permalink. Leave a comment.

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