Comments on: Massachusetts Credit Unions to Provide Discounted Mortgage Program to First Time Home Buyers http://www.therealestatebloggers.com/2006/03/07/massachusetts-credit-unions-to-provide-discounted-mortgage-program-to-first-time-home-buyers/ Real Estate Blog, Mortgage, and Development News Fri, 20 Nov 2009 23:48:48 -0600 http://wordpress.org/?v=2.8.6 hourly 1 By: Britt Gwinner http://www.therealestatebloggers.com/2006/03/07/massachusetts-credit-unions-to-provide-discounted-mortgage-program-to-first-time-home-buyers/comment-page-1/#comment-39730 Britt Gwinner Tue, 10 Apr 2007 20:38:36 +0000 http://therealestatebloggers.com/2006/03/07/massachusetts-credit-unions-to-provide-discounted-mortgage-program-to-first-time-home-buyers/#comment-39730 If the C.U.s underwrite correctly, they can see if the maximum rise fits the borrower's prospects. With the 5% cap, and a reasonable down payment, this could work well. Clearly, this will be a limited program. C.U.s won't be able to offer a lot of these loans without sacrificing an important part of their income. The resulting loans won't be marketable without realizing the mark-to-market loss that the sub-market interest rate implies. If the C.U.s underwrite correctly, they can see if the maximum rise fits the borrower’s prospects. With the 5% cap, and a reasonable down payment, this could work well.

Clearly, this will be a limited program. C.U.s won’t be able to offer a lot of these loans without sacrificing an important part of their income. The resulting loans won’t be marketable without realizing the mark-to-market loss that the sub-market interest rate implies.

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