Loan Modification

Ann Ashburn, President of AmeriDream, Inc., today responded to the U.S. Department of Housing & Urban Development's announcement that certain organizations may use the federal $8,000 first-time homebuyer tax credit to offer government-subsidized downpayment assistance (DPA) to first-time homebuyers in need of a downpayment.

"We firmly believe in providing downpayment assistance to creditworthy homebuyers, however HUD's policy saddles the U.S. taxpayer with an unnecessary fiscal burden and saddles first-time homebuyers with more debt. It is difficult to rationalize how homeowners are better off borrowing potentially more than 100% of the purchase price of their homes rather than using DPA funded in part by sellers to create immediate equity in their homes that does not have to be paid back. In addition, HUD's plan proposes no underwriting standards, no appraisal standards, and has no provisions to prevent borrowers from taking on debt beyond their means. Lastly, this taxpayer-funded subsidy will last only a few months, when the housing market needs a long-term DPA solution.