Tagged: soft second mortgage

Can’t Afford That House? No Problem.

In the event that you missed it about a month ago, Mayor Landrieu announced a new program of $52.3 million in soft second mortgage homebuyer assistance. The program works like this; prospective homebuyer goes to the bank to get pre-qualified for a mortgage, bank says they’re approved for X, but homebuyer wants house that’s more expensive than X, bank and homebuyer apply with city for up to $65,000 extra for home they want, if they’re still in home after 10 years the loan is forgiven. All at federal taxpayer expense.

Now, this is not the first time the city has done this. The Nagin administration had a similar program after the storm. But really, let me get this straight. Instead of taking the position that maybe, just maybe, the buyer should just stick with the home they can afford or keep saving until they can do better, the city of New Orleans via a federal Community Development Block Grant program says “don’t worry about it, we’ll write you a check.” WTF?! Does no one remember what happened in 2008?! Yet another reminder to myself that I must stop thinking that the government can learn from its mistakes. Especially when the magic lies words of “affordable housing” and “first time home buyer” are involved. What about the people who do the responsible thing and figure out what their budget is and what they can qualify for and proceed within those boundaries? Where’s their check? Oops, I better be careful or next we’ll have the Responsible Homebuyer Debt Amnesty Bailout.

Where are the sane people?