https://www.rocketmortgage.com/learn/one-plus

Quote:

---

Benefits Of ONE+ by Rocket Mortgage

This loan option has several benefits. Chief among them is the ability to put down as little as 1% and get into a home. Rocket Mortgageis providing a grant of 2% of the purchase price. Under this scenario, you would enter your home with 3% equity. Clients who qualify may contribute up to 3% toward a down payment while still receiving the 2% grant.

This is available for both first-time and repeat home buyers. There are no restrictions on where you can live or where you move from. The program is available nationwide.

Qualifying for ONE+ by Rocket Mortgage

Because this is a conventional loan product tied to affordable housing goals, there are several requirements you should know about. Here's a brief rundown:

• You can't qualify if you make higher than 80% of the median income in the area in which you're looking to buy. For example, if you live in Macomb County, Michigan the area median income is $90,800. You can't use more than $72,640 to qualify for this ($96,200 0.8 = $76,960). You can look up your area's median income with Fannie Mae's lookup tool.
• You need a qualifying FICO Score of 620 or better.
• This is for single-unit primary residences only.
• When combined with our 2% grant, your initial down payment can be no more than 5%.

---

For those who remember the early aughts and the housing debacle, is this similar to what happened back then, or did those times just leave such a bad taste in my mouth that I'm just getting the wrong vibes from this?

Smells like desperation from a company that isn't originating enough mortgages to justify their recent acquisitions and capex spend.

It's pretty similar. Basically, giving mortgages to people who really had no business having a mortgage. Thanks alot in part to a democrat named Barney Frank who encouraged banks giving mortgages to people who really did not qualify.

That is a lot of what kicked off that crisis. They also gave out a lot of variable rate mortgages. Which is just insane that anyone would go for that. When the crisis kicked off the rate on those variable rate mortgages went up and made the crisis worse. I was in military sat the time and was selling a home for a PCS. We ended renting it out and keeping it for 10 years until things recovered.

No Spin Ag said:

---

https://www.rocketmortgage.com/learn/one-plus

Quote:

---

Benefits Of ONE+ by Rocket Mortgage

This loan option has several benefits. Chief among them is the ability to put down as little as 1% and get into a home. Rocket Mortgageis providing a grant of 2% of the purchase price. Under this scenario, you would enter your home with 3% equity. Clients who qualify may contribute up to 3% toward a down payment while still receiving the 2% grant.

This is available for both first-time and repeat home buyers. There are no restrictions on where you can live or where you move from. The program is available nationwide.

Qualifying for ONE+ by Rocket Mortgage

Because this is a conventional loan product tied to affordable housing goals, there are several requirements you should know about. Here's a brief rundown:

• You can't qualify if you make higher than 80% of the median income in the area in which you're looking to buy. For example, if you live in Macomb County, Michigan the area median income is $90,800. You can't use more than $72,640 to qualify for this ($96,200 0.8 = $76,960). You can look up your area's median income with Fannie Mae's lookup tool.
• You need a qualifying FICO Score of 620 or better.
• This is for single-unit primary residences only.
• When combined with our 2% grant, your initial down payment can be no more than 5%.

---

For those who remember the early aughts and the housing debacle, is this similar to what happened back then, or did those times just leave such a bad taste in my mouth that I'm just getting the wrong vibes from this?

---

You're not wrong, but it wasn't as bad as some of the shenanigans that were happening in the early 2000s. Back then, you had liars loans that didn't verify any income or were just straight fraud, and adjustable rate loans with sub-1% rates that were jacked up after the primary 2-3 year term expired. The biggest fraud was the bundling of loans that were high risk that were categorized as low risk and then sold on the secondary market.

Stuff like this was how it started, all tied to affordable housing. When the "no down payment" and "no income verification" loans start showing up, that's when it's time to panic and start shorting the housing market in general.

Not too dissimilar than what the big builders are doing and buying down rates.

Just an effort to keep topline sales numbers per unit high and hide the discounts elsewhere.

HTownAg98 said:

---

No Spin Ag said:

---

https://www.rocketmortgage.com/learn/one-plus

Quote:

---

Benefits Of ONE+ by Rocket Mortgage

This loan option has several benefits. Chief among them is the ability to put down as little as 1% and get into a home. Rocket Mortgageis providing a grant of 2% of the purchase price. Under this scenario, you would enter your home with 3% equity. Clients who qualify may contribute up to 3% toward a down payment while still receiving the 2% grant.

This is available for both first-time and repeat home buyers. There are no restrictions on where you can live or where you move from. The program is available nationwide.

Qualifying for ONE+ by Rocket Mortgage

Because this is a conventional loan product tied to affordable housing goals, there are several requirements you should know about. Here's a brief rundown:

• You can't qualify if you make higher than 80% of the median income in the area in which you're looking to buy. For example, if you live in Macomb County, Michigan the area median income is $90,800. You can't use more than $72,640 to qualify for this ($96,200 0.8 = $76,960). You can look up your area's median income with Fannie Mae's lookup tool.
• You need a qualifying FICO Score of 620 or better.
• This is for single-unit primary residences only.
• When combined with our 2% grant, your initial down payment can be no more than 5%.

---

For those who remember the early aughts and the housing debacle, is this similar to what happened back then, or did those times just leave such a bad taste in my mouth that I'm just getting the wrong vibes from this?

---

You're not wrong, but it wasn't as bad as some of the shenanigans that were happening in the early 2000s. Back then, you had liars loans that didn't verify any income or were just straight fraud, and adjustable rate loans with sub-1% rates that were jacked up after the primary 2-3 year term expired. The biggest fraud was the bundling of loans that were high risk that were categorized as low risk and then sold on the secondary market.

Stuff like this was how it started, all tied to affordable housing. When the "no down payment" and "no income verification" loans start showing up, that's when it's time to panic and start shorting the housing market in general.

---

Oh yeah. I forgot about the bundling of high risk loans. That was a fiasco.

Sims said:

---

Not too dissimilar than what the big builders are doing and buying down rates.

Just an effort to keep topline sales numbers per unit high and hide the discounts elsewhere.

---

There was also the hiding of concessions in the comps on the multiple listing services. That was an easy way to bump up the market value by 5%-10% when things really started going downhill.

If it is low down payment option that is not what caused the housing debacle
People with jobs buying a house they are going to live in with a low down payment is a probably good thing

But sure let's talk about people who shouldn't have a mortgage because they are poor and stupid and be perpetual renters

Heineken-Ashi said:

---

Smells like desperation from a company that isn't originating enough mortgages to justify their recent acquisitions and capex spend.

---

No one is originating enough mortgages right now.

Houston's median sale price is down ~5.6% YOY. Sales are down 1% YOY and median days on market is up over 15%.

https://www.redfin.com/city/8903/TX/Houston/housing-market

Sq 17 said:

---

If it is low down payment option that is not what caused the housing debacle
People with jobs buying a house they are going to live in with a low down payment is a probably good thing

But sure let's talk about people who shouldn't have a mortgage because they are poor and stupid and be perpetual renters

---

No one says they shouldn't have mortgages. But they should follow the same barriers to entry as others. All this will do is promote to the poor and stupid people to buy too much house, end up house poor, and be in a perpetual debt cycle that will lead to foreclosure. One major home repair and these people are cooked financially.

The problem isn't the down payment; it's the interest rate that is going to be a part of that note and having the appropriate level of income to support that monthly payment. If the income level isn't high enough, there's going to be a default at some point down the road. The other problem is the people that originate the note are long gone by the time that happens, so they don't have any skin in the game.

I have a problem with limiting it to people at 80% of the median income. Seems like these are the people who are high risk. Why would they not spread the risk out and accept people at median or higher? I'm not in this world so asking for a genuine explanation.

AgNav93 said:

---

It's pretty similar. Basically, giving mortgages to people who really had no business having a mortgage. Thanks alot in part to a democrat named Barney Frank who encouraged banks giving mortgages to people who really did not qualify.

That is a lot of what kicked off that crisis. They also gave out a lot of variable rate mortgages. Which is just insane that anyone would go for that. When the crisis kicked off the rate on those variable rate mortgages went up and made the crisis worse. I was in military sat the time and was selling a home for a PCS. We ended renting it out and keeping it for 10 years until things recovered.

---

Goodness, I had almost completely forgotten about that corrupt sleazy disgusting pervert. The Dem party has been full of filthy sickening people for quite some time now.

My guess is what they're planning on doing is the same thing these loan originators did circa 2000: bundle the risky loans with their more conventional financed notes, and spread the risk. The question will be can they hide enough bad loans with the good loans and hope no one will notice.

My wife and I bought our first home in '05 with a zero down,low closing costs, interest only loan with no prepayment penalty and it was the best decision we ever made. We made payments like we were in a traditional mortgage, and in less than 5 years we owned about 30% of our house and had about $80k in equity when we sold it. Our first mortgage allowed us to buy a vacation home in Port A in '07 because we still had our down payment cash from our first mortgage and we still have that place today. Nontraditional mortgages are not inherently bad, it's just that people who make poor financial decisions and stupid people seem to flock to them because they think they are somehow gaming the system.

IMO
It's actually people getting adjustable rate loans That and no equity and people buying them as investments was the issue
Yes it is better if the owner has more equity in the house but if the payment is locked in for the life of the loan a small down payment I still think is a good idea because it allows people to stop renting

Quote:

---

Nontraditional mortgages are not inherently bad, it's just that people who make poor financial decisions and stupid people seem to flock to them because they think they are somehow gaming the system.

---

That...and they only use them to get cheaper payments.

You're one of the very few who pay extra on them, and use them to your advantage.

AtticusMatlock said:

---

I have a problem with limiting it to people at 80% of the median income. Seems like these are the people who are high risk. Why would they not spread the risk out and accept people at median or higher? I'm not in this world so asking for a genuine explanation.

---

The risk isn't based on income, more so the "fair" credit rating that's below the national average. And that grant isn't going to be much based on how much of a loan they would be willing to give.

The maximum home price for someone with a $70k income is $250k. That's a $2000k / month mortgage. It's high, but a good loan officer will vet their other debts and expenses to make sure this is a safe bet.

In such a case, Rocket Mortgage is putting up $5k. They are banking on the money they make from interest recouping that before someone defaults.

There are plenty of people a few years out of college or trade school making that with no debt. If their credit score is good and they are responsible, I don't see this as a bad investment from Rocket.

Once someone gets into a house and starts making payments, that price is locked (assuming a traditional load with a fixed interest). Income should only go up - far more than the tax payment. So you're building equity that will more quickly allow you to move up to a bigger house once your income does as well.

I'm also guessing that Rocket is banking on that person they "invested" in moving to a larger house from such a starter home (most likely a condo or townhouse), and taking out a larger loan.

Head--->desk--->Head--->desk

NASAg03 said:

---

AtticusMatlock said:

---

I have a problem with limiting it to people at 80% of the median income. Seems like these are the people who are high risk. Why would they not spread the risk out and accept people at median or higher? I'm not in this world so asking for a genuine explanation.

---

The risk isn't based on income, more so the "fair" credit rating that's below the national average. And that grant isn't going to be much based on how much of a loan they would be willing to give.

The maximum home price for someone with a $70k income is $250k. That's a $2000k / month mortgage. It's high, but a good loan officer will vet their other debts and expensive to make sure this is a safe bet.

In such a case, Rocket Mortage is putting up $5k. They are banking on the money they make from interest recouping that before someone defaults.

There are plenty of people a few years out of college or trade school making that with no debt. If their credit score is good and they are responsible, I don't see this as a bad investment from Rocket.

Once someone gets into a house and starts making payments, that price is locked (assuming a traditional load with a fixed interest). Income should only go up - far more than the tax payment. So you're building equity that will more quickly allow you to move up to a bigger house once your income does as well.

---

But 90%+ a few years out college or trade school with no debt aren't in that 80% of median income. This seems very targeted towards people that fit a criteria of financial illiteracy. 620 is midrange for 'fair credit' by current ranks. I think a 620 is poor. 650 is fair IMO.

Loan volume from this is going to be incredibly small relative to the total market, because the overlap between 80% median income, able to only put 5% down on a property, and carry mortgage insurance will kill most individuals ability to qualify under DTI requirements. It's still a subject to standard UW requirements.

The optimal number of foreclosures is not zero. We over-corrected a bit on lending standards coming out of the financial crisis and the result was that we build far fewer starter homes because those are generally bought by people with weaker finances. That has moved the first rung of the home ownership ladder too high, IMO.

For example, the starter home I bought in suburban Houston in 2013 for $170K is now up 100% in price. The upgraded house we moved to in 2019 is up ~60% from its 2013 value. It's been a tighter market at the bottom.

Sq 17 said:

---

If it is low down payment option that is not what caused the housing debacle
People with jobs buying a house they are going to live in with a low down payment is a probably good thing

But sure let's talk about people who shouldn't have a mortgage because they are poor and stupid and be perpetual renters

---

Requiring a significant down payment means they have skin in the game. If I have $30k equity in a house versus $3000, I'm less likely to just let it go back to the lender if I get into a financial bind.

[url=https://www.rocketmortgage.com/learn/what-credit-score-is-needed-to-buy-a-house][/url]

Quote:

---

FICO Score of 620 or better

---

1) In 2006, you could get a liar's loan with zero amount of income verification if you had a 720+ credit score on a jumbo (read, around $1MM) loan with 0% down.

2) Wall street took 1,000 of these loans, and put the first 700 of them to get paid off in a "tranche" that the ratings services rated as similar in risk to a blue-chip bond. The idea was that it was highly unlikely that 30% of these loans would face foreclosure, so the first 70% of the loans that were paid off should be low risk.

3) The interest rates being collected on these 1st tranche loans were very attractive to investors at the time for the level of risk the ratings agencies giving them. Demand exceeded supply. Wall street started selling "default credit swaps" which were derivatives of these 1st tranche loans, but were not really secured by real estate. They were secured by insurance that the loans would perform as expected.

4) The 1st tranche loans did not perform as expected, because lair loans with no income verification is a very, very bad idea prone to fraud. Foreclosures were well over expectations. When the 1st tranches didn't perform, the banks that were writing the "synthetic" mortgage tranches with those swaps owed people a lot of money, and didn't have any collateral besides their own balance sheet. More than anything, it was the pervasive use of Credit Default Swaps that were highly rated by the debt rating agencies that were actually very speculative that brought down Wall Street.

5) Lehman Brother's goes bankrupt. A corrupt Chicago politician wins the presidency. Mayhem.

This is a stupid program for Rocket Mortgage, and reeks of desperation. There are probably some federal guarantees for low-income mortgages written into the BBB that we don't know about, but they do. This is very similar to what was going on in 2006, but on a much smaller scale, with much less money involved.

NASAg03 said:

---

AtticusMatlock said:

---

I have a problem with limiting it to people at 80% of the median income. Seems like these are the people who are high risk. Why would they not spread the risk out and accept people at median or higher? I'm not in this world so asking for a genuine explanation.

---

The risk isn't based on income, more so the "fair" credit rating that's below the national average. And that grant isn't going to be much based on how much of a loan they would be willing to give.

The maximum home price for someone with a $70k income is $250k. That's a $2000k / month mortgage. It's high, but a good loan officer will vet their other debts and expenses to make sure this is a safe bet.

In such a case, Rocket Mortgage is putting up $5k. They are banking on the money they make from interest recouping that before someone defaults.

There are plenty of people a few years out of college or trade school making that with no debt. If their credit score is good and they are responsible, I don't see this as a bad investment from Rocket.

Once someone gets into a house and starts making payments, that price is locked (assuming a traditional load with a fixed interest). Income should only go up - far more than the tax payment. So you're building equity that will more quickly allow you to move up to a bigger house once your income does as well.

I'm also guessing that Rocket is banking on that person they "invested" in moving to a larger house from such a starter home (most likely a condo or townhouse), and taking out a larger loan.

---

They're not holding the note. They are bundling it with others and selling it before the ink is dry on the paper. They're hoping they can spread the risk out over enough strong notes that it mitigates some of that risk, and the discount on those bad notes isn't too high. This is how the financial crisis of 2008 onward began.

Logos Stick said:

---

Sq 17 said:

---

If it is low down payment option that is not what caused the housing debacle
People with jobs buying a house they are going to live in with a low down payment is a probably good thing

But sure let's talk about people who shouldn't have a mortgage because they are poor and stupid and be perpetual renters

---

Requiring a significant down payment means they have skin in the game. If I have $30k equity in a house versus $3000, I'm less likely to just let it go back to the lender if I get into a financial bind.

---

In an environment where you have 25% inflation over four years, the equity of the house will increase quickly. That $3,000 of equity on a $200,000 house turns into $30,000 of equity pretty quickly. If you do walk away after four years, and inflation acts like it should given the current spending spree that congress is on, the bank wins.

The question is if we're going to see more of this. If it escalates, hold onto your butt.

As an aside, if you haven't seen The Big Short, watch it. It's an over-simplification of what happened, but it's mostly true.

HTownAg98 said:

---

The question is if we're going to see more of this. If it escalates, hold onto your butt.

As an aside, if you haven't seen The Big Short, watch it. It's an over-simplification of what happened, but it's mostly true.

---

I like The Big Short. It explains the situation pretty well, in a way that most people can understand.

It is almost as good as the Southpark episode Margaritaville, which is about the same topic, but even better.

Back then they were giving million$+ mortgages out to bus drivers knowing they'd never make the very first payment. But letting those poor souls believe they qualified. 45 day later the foreclosure process began.

No Spin Ag said:

---

https://www.rocketmortgage.com/learn/one-plus

Quote:

---

Benefits Of ONE+ by Rocket Mortgage

This loan option has several benefits. Chief among them is the ability to put down as little as 1% and get into a home. Rocket Mortgageis providing a grant of 2% of the purchase price. Under this scenario, you would enter your home with 3% equity. Clients who qualify may contribute up to 3% toward a down payment while still receiving the 2% grant.

This is available for both first-time and repeat home buyers. There are no restrictions on where you can live or where you move from. The program is available nationwide.

Qualifying for ONE+ by Rocket Mortgage

Because this is a conventional loan product tied to affordable housing goals, there are several requirements you should know about. Here's a brief rundown:

• You can't qualify if you make higher than 80% of the median income in the area in which you're looking to buy. For example, if you live in Macomb County, Michigan the area median income is $90,800. You can't use more than $72,640 to qualify for this ($96,200 0.8 = $76,960). You can look up your area's median income with Fannie Mae's lookup tool.
• You need a qualifying FICO Score of 620 or better.
• This is for single-unit primary residences only.
• When combined with our 2% grant, your initial down payment can be no more than 5%.

---

For those who remember the early aughts and the housing debacle, is this similar to what happened back then, or did those times just leave such a bad taste in my mouth that I'm just getting the wrong vibes from this?

---

That was part of the issue but a bigger issue is allowing people to borrow more than the value of the equity in the home, often up to 125% in many states. That made it so someone could take out a loan to buy a $400k house with little to nothing down and then immediately borrow an additional $100k in cash for whatever they wanted. Thus they had $500k in debt on a house only worth $400k. It was a pyramid scheme that worked until the prices collapsed and suddenly you had volumes of bad loans with assets worth far less than what was owed.

That is also what kept Texas from being hit as hard as so many other places because here you can only borrow value above 80% of your equity so you can't get way upside down on second mortgages.

Making a home loan to someone with a 620 credit score though is lunacy unless they are putting a huge amount of cash down and have proven income. If you have a high credit score (750 plus) then it makes sense not to have to put down much money as you have earned it.

This deal looks much better to me than what Country Wide was doing back in the bad ole days of the housing crash. Borrowers are buying their primary residence, they have to have verifiable income and a minimum FICO score of 620. I believe. It looks like a way to get more people in their own homes that they should be able to afford. I think there is pent up home demand. House prices are finally coming down. Now buyers need interest rates to come down.

I have been buying Rocket Mortgage stock and this makes me want to add a little more.

This is just the FHLMC HomePossible/FNMA HomeReady loan programs that were introduced in 2015 with a down payment assistance from Rocket laid on top of it. The volume of loans from these programs is absolutely miniscule for the 3% variety (betting <0.2% of home purchase loans) and this won't move the needle, as the biggest barrier to qualification are the restrictive UW guidelines, not cash.

This is an advertising program with minimal cost to Rocket to say "we care about home affordability" without actually doing much.

BusterAg said:

---

HTownAg98 said:

---

The question is if we're going to see more of this. If it escalates, hold onto your butt.

As an aside, if you haven't seen The Big Short, watch it. It's an over-simplification of what happened, but it's mostly true.

---

I like The Big Short. It explains the situation pretty well, in a way that most people can understand.

It is almost as good as the Southpark episode Margaritaville, which is about the same topic, but even better.

---

It does a good job for the most part. It ignores the causes and origins of the egregious loans and insanely risky financial vehicles but it highlights the environment that existed very well.

Rocket Mortgage should stop giving interest-free loans to their J-ish relatives.

https://wltreport.com/2024/02/02/fact-check-do-jews-get-interest-free-home/