Loophole fuels zero-down mortgages
"Homebuilders across the country, including Dominion Homes, have found a way around a federal law barring sellers from giving money directly to buyers for a down payment.
They route the money through charities such as the Nehemiah Corp. of America, a faith-based group in California."
"In 2002, HUD updated an earlier study of 2,261 Nehemiah-assisted mortgages in Indianapolis, Las Vegas, and Sacramento and Stockton, Calif. Researchers documented a 19.4 percent default rate among those loans.
Customers who bought a house without Nehemiah’s help had a default rate of half that level."
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