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The Cookout

Bank of America Offering Zero Down, Zero Closing Cost Mortgages To Help Grow Black Homeownership

Rollie Forbes

Rollie Forbes

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www.nbcnews.com

Bank of America: Zero-down-payment mortgage for first-time buyers

Residents in selected Charlotte, Dallas, Detroit, Los Angeles and Miami neighborhoods will be offered the program first.
www.nbcnews.com www.nbcnews.com


Bank of America said it is now offering first-time homebuyers in a select group of cities zero down payment, zero closing cost mortgages to help grow homeownership among Black and Hispanic/Latino communities.

The option will first become available in certain neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami. The new mortgage, called the Community Affordable Loan Solution, aims to help eligible individuals and families obtain an affordable loan to purchase a home, the bank said.
 
Jay

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    Rollie Forbes said:
    www.nbcnews.com

    Bank of America: Zero-down-payment mortgage for first-time buyers

    Residents in selected Charlotte, Dallas, Detroit, Los Angeles and Miami neighborhoods will be offered the program first.
    www.nbcnews.com www.nbcnews.com


    Bank of America said it is now offering first-time homebuyers in a select group of cities zero down payment, zero closing cost mortgages to help grow homeownership among Black and Hispanic/Latino communities.

    The option will first become available in certain neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami. The new mortgage, called the Community Affordable Loan Solution, aims to help eligible individuals and families obtain an affordable loan to purchase a home, the bank said.
    Click to expand...
    0% down, 0 closing costs sounds good at first glance but you're really wrapping a noose around your wallet's neck. Because if you're buying a $500,000 house with 0% down which means you have ZERO equity.

    Even if you could qualify for this program it sounds like a bad buy. If they really want to help they need to give grants to Black Americans. Give us a grant for 20% on a house in a particular tract or up to a particular value like median house in a given area.

    I think this may be a means to get people into the homes they will be foreclosing on in the near future. They foreclose on it, give a loan to a person who typically wouldn't qualify, group it up into a tranche, and sell it off to institutional investors. '

    Or if they don't off-load the loans they will use the monthly payments as bridge liquidity, foreclose at a later date, and sell the house again. Similar to the contract loans they used to give in the 50's when the FHA said "No loans to Blacks".
     
    Real One

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    It's clear I really need to learn about all of this stuff myself. I'm not a homeowner, but I hope to one day be one. And I am always suspicious of deals like this, because there always is that fine print that says you owe us later or you will be locked into something. Usually something that sounds too good to be true, is probably not going to turn out to be true. There's always a catch for stuff like this. They still want to make their money, and they will gladly wait for it.
     
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    RCNAL

    RCNAL

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    First, EVERY major bank and I mean EVERY single one including Bank of America has had to pay a fine for lending discrimination to blacks. Bank of America fined $335m for minority discrimination

    That said, this is for blacks and latinos. There is always, always, always a trick bag to this. My guess on the various ways they will eff up black people?

    1. If its a very good program, the vast majority will go to Latinos and a small number to over qualified blacks and then claim they helped black people.

    2. The interest rate. These banks have traditionally over charged blacks on interest rates compartively to the same white counterpart.

    3. Wrong valuation on the home. They state the real value as different than the actual value of the home and you are given a loan accordingly.

    I would do my research prior and see what they are willing to do for a specific home. And then see how it compares to others and more importantly, if possible, the loan a white person would get for the same criteria.
     
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