No Money? No Problem! | HUD Offers REO Homes for $100 Down in Select States Using Non Recourse Leverage

From ZeroHedge…


Got A Hundred Bucks? Buy A Home (Or Virtually Anything Else) Using 2,000x Non Recourse Leverage

The adjustment to the government’s HARP program to get anything with a pulse as close to the discount window as possible was not the only proposal to revive the moribund US housing market. According to a new proposal by HUD, beginning this month and continuing for a year, anyone with a just $100 will be allowed to buy a HUD-owned REO home. In essence: the new buyer is merely taking over the mortgage payments in a repeat of what happened in 1970s New York along the Central Park West corridor. Granted for now it is stricly limited to only… 28 states! But it gets better: “HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan.” Said otherwise, a $100 downpayment gives one unlimited degrees of freedom how to spend non-recourse, massively levered capital, and courtesy of money’s fungibility, to even fund, shhh, the occasional iPhone. “Matt Martin, CEO of Matt Martin Real Estate Management (MMREM), says this is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA’s 203k offering.” Why of course it is: it will only take enterprising Americans a few weeks to realize that the latest HUD program is basically an EFSF in sheep’s clothing, which provides US consumers with a Benjamin in their pocket, the ability to lever up by a factor of about two thousand (or more) and use the proceeds for pretty much anything (but make sure to call it “home repairs”). And when the HUD is stuck with hundreds of billions of non-performing, delinquent loans, what then? Why the same that will happen to the EFSF: another wholesale taxpayer funded bailout… of those who were tricky enough to figure out this latest subsidy of the global retailer base.

From DSNews:

HUD has approved a program aimed at putting foreclosed homes back into the hands of owner-occupant buyers.


In select states, from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home.


The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Standard FHA underwriting guidelines apply, and the sale must be for the full amount of the current list price.


The $100 down payment incentive program has been approved for two of HUD’s four national regions – the regions managed by the Denver Homeownership Center and the Atlanta Homeownership Center. HUD homes in the states listed, as well as the Caribbean are currently eligible for the program.

The states in which this scheme will work:

Denver Homeownership Center’s Jurisdiction:

New Mexico
North Dakota
South Dakota

Atlanta Homeownership Center’s Jurisdiction:

North Carolina
South Carolina

It goes on:

HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan.


Matt Martin, CEO of Matt Martin Real Estate Management (MMREM), says this is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA’s 203k offering.


MMREM is under contract with HUD to assist with disposition sales of its repossessed homes. MMREM handles properties throughout 16 states, or about a third of HUD’s REO portfolio.


With an FHA 203k loan, “buyers can find a property that needs some TLC, fix it up however they want to, and finance the whole thing for $100,” Martin explained.


“MMREM is excited to work with this recent initiative, in a way that it supports putting HUD homes back into the hands of homeowners,” Martin said.

For those who think there has to be a snag somewhere in the fine print, because “there is no such thing as a free home” well… no:

In addition to $100 down instead of FHA’s typical 3.5 percent down payment, HUD says it will also cover up to 3 percent of the closing costs in most cases.

And then they wonder where the source of all this inflationary pressure comes from…


9 Responses to “No Money? No Problem! | HUD Offers REO Homes for $100 Down in Select States Using Non Recourse Leverage”
  1. talktotennessee says:

    Well thats one way to go around appraisals and market value isn’t it? If you don’t need one and we are going back to loan assumptions to benefit the banks and pass the bad loans down the road a piece, maybe all will work you by the time they get a little interest to slick the road to destruction. And guess what? Not to worry about that bad chain of title either. Going to be hidden in the former loan. No one out there is going to sue them about most of them anyway are they?
    Home free? Good God, the banks are HOME FREE!
    Everyone has $100 don’t they? Didn’t you know the guvernment men would find a way to hoodwink everyone in favor of the banks. They could wipe the past default clean and let the homeowner keep his home and start over. NOT!
    That would be MORAL HAZARD!
    You know I am not one given to bad language but the efforts to dupe, deceive and defraud are bringing out the worst or best in me! Not sure I can contain myself much longer.

  2. Readdocs says:

    What title companies are going to underwrite a clear title guarantee on these foreclosed
    properties? Or are the folks being suckered in going to see in the fine print, if
    they bother to read it, they are buying with no guarantees and ‘as is’ with no
    This is going to enhance the severe damage already done to our 200 year old
    way of protecting our rights to ownership of private properties.
    What we can do is by word of mouth is tell everyone to not buy foreclosed or short
    sell properties. There is no more effective way of reaching the buying public than
    through one on one. It’s the most effective way of advertising.
    Keep talking!

  3. Helene Fox says:

    Directing their energy toward supporting the home owner who is about to be homeless may be less costly, less effort, and more rewarding than supporting lenders who receive incentives to foreclose, thereby putting more money into the pocket of large corporations. Perhaps money spent on providing incentives to lenders for working out loans to individuals is of greater benefit to the current downward economy mess as well as to the thousands upon thousands of families that are forced into obtaining State assistance due to homelessness.

    • housemanrob says:

      Really Helene………jump up off of one criminal deal onto another is going to do what for who……whos Koolaid are you drinking?

    • lvent says:

      @Helene Fox…how many times should they be allowed to cash the note? An unindorsed note means they sold that note…and they got paid in full. They have to destroy theoriginal note…The entity that paid them for that note…did not lend us any money and either did the originator. The money was created by the signature on the Promissory note..Yes, our signature funded theloan, they never borrowed any one any of their own money. They created a Debt out of thin air and called it a loan…
      They received the money from the Federal Reserve Bank which was deposited into an escrow account which just paid off the alledged debt. Again, it was our signature (U.S. TAXPAYERS FUNDED AND BACKED THE CREDIT) on the promissory not that funded the alleged loan.
      So they have committed Fraud, they counterfeited money, they created a debt out of thin air they are not following the GAAP (General Acceptance Accounting Practices) they never provided Full Disclosure as to their actions, this is a violation of Contract Law.
      Per GAAP and Federal Reserve publications two loans were exchaged. You lent the promissory note to the bank that funded the laon back to you. The loan from you to the bank is the deposit of the promissory note, GAAP requires that the bank “match” a new bank liability with your name on it showing that the bank owes you for the deposit they accepted from you
      If you had the Bank Audited by a competent CPA it would prove by the bookeeping entries that they lent no money to purchase your promissory note.
      The banks charter requires the bank to follow the law-GAAP, you can presume the bank must follow the law or the contract is an illegal contract..
      Applicable federal criminal statutes used in prosecutions of mortgage fraud cases include 18 USC Section 1005(false representations to a federally insured institution); 18 USC Section 1005 (false statements on application); 18 USC Section 1010 (false statements in HUD loan); 18 USC Section 1341 (mail fraud); 18 USC Section 1343 (wire fraud); 18 USC Section 1344 (bank fraud); 18 USC Section 1951, et seq. (RICO); AND 18 USC Section 1957 (transaction with illegal proceeds) and Securites Fraud and Collateral Fraud…they have created 1.2 quadrillion in derivatives backed by zero..UNSUSTAINABLE DEBT….
      They should all be in prison Helene..
      .There has been exponential fraud committed off of the signatures of the American people…without our knowledge.

    • Helene….Are you saying that more taxpayers money should be used to provide incentives to lenders for working out loans is a greater benefit to the current downward economy ? Who do you think caused this downward economy? It certainly was not the homeowners who have lost their homes taken in mass robbery of the country…taken through the fraudulent ponzi scheme that is the plan of the evil Rome…the NWO…and our corrupt government….Helene…I hate to burst your bubble…but you are not on the right track …in fact the train you are on is derailed….this is not about a downward economy….you need to learn the facts of the biggest robbery in the history of the world…right here in America….and the planned take over of the United States of America….America will be history….and you are concerned about the downward economy? WAKE UP

  4. Jim Bethea says:

    The snag is that big banks are trying to illegally foreclose on these homes and cannot sell them because the titles/deeds can produce many various ramifications ~ One is becoming more apparent is that the homeowners who contest their foreclosures as being illegal and regain ownership will then make the foreclosure sale voidable and the new owners will lose ~~ If they can filter these through a government and these titles are contested by the priviously foreclosed upon owners then the taxpayers will lose once again ~~

    You can bet your last horseshoe that in the fine print there will be a clause that the new buyers waiver all rights to contest the validity of these sales???????????

    • You can bet your last horseshoe, your horsem and anything else that you have; inlcuding your 3 chillun AND the grandkids.

      Google the documents for purchasing an REO home (almost all of them are on line) HUD, Fannie Mae, Freddie Mac and most lenders as well, search for “Bank of America REO addendum” or Fannie Mae REO addendum”. Read it carefully.

      I have read the HUD, Fannie and Freddie ones lately (they change from time to time) and all 3 have some SERIOUS disclaimers included.

      The buyer is responsible for everything except Jesus’ birth and the lender/guarantor/seller is responsible for zilcho.

      Former Fannie Mae Broker- Specialist

      I have been writing for years that buying REO properties is risky business. Nobody would listen to me because they were being told that the property came with a title policy.

      It does.

      But it is a title policy which offers NO protection to the buyer.

      I discovered this when I was working for Fannie Mae back in Indianapolis and I was mortified that the por buyers did not understand the rights they were giving up when they bought my lovely Fannie Mae, 4 year old home which had been lost to foreclosure.

      Doesn’t matter a ot now since I have since discovered and most of you who are reading this klnow that ALL the titles on properties which have been purchased in the past 15 years are hopelessly scrambled IF:

      a. the property was registered with MERS
      b. the property was securitized

      There is nothing you NOR they can do; so stay put and wait them out.

      Best of luck, eventually you should be able to file a quiet title action and get clear title to the home you
      already own. Nobody has a better title than you do, you just have to take the proper action to ‘establish’that no one has an enforceable claim to your home.

      Keeping reading, keep learning and DON”T MOVE.

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