Rural housing authority gave millions to ineligible borrowers or 22% of their loans

Jul 082012

You are talking about 1,500 loans here, but they are huge loans. This also happened with FHA where almost 7,000 loans were given out to people that owed back taxes. Granted Orange County hasn’t been rural since 1980, it’s still interesting.

Ineligible Borrowers Got Hundreds of Millions in Stimulus Home Loans

Lachlan Markay July 5, 2012 at 11:13 am

The Agriculture Department’s Rural Housing Service likely loaned hundreds of millions of dollars to ineligible borrowers as part of President Obama’s stimulus package, a report by federal watchdogs has revealed.

The stimulus earmarked more than $1 billion for RHS home loans in rural communities. According to the Ag Department’s Inspector General, up to $292.3 million of those loans may have financed ineligible projects, or gone to borrowers that did not meet the loan program’s requirements due to their potential inability to repay the loans.

The IG examined a sample of 100 RHS stimulus loans, and found that 17 had been extended to borrowers who “(1) had no history of stable and dependable income, (2) had a credit history that did not indicate the ability and willingness to repay a loan, or (3) did not meet repayment ability guidelines.”

Six loans in the report’s sample financed properties that did not meet the program’s eligibility requirements. Some “lacked sufficient documentation that the homes were decent, safe, and sanitary,” according to the report.

The IG extrapolated with 95% certainty that between 1,111 and 2,433 loans totaling between $124.3 million and $292.3 were made to ineligible borrowers or projects. The report faulted RHS personnel for the oversight.

Tustin Overview

Median home price is $399,000. Based on a rental parity value of $522,000, this market is under valued.

Monthly payment affordability has been worsening over the last 2 month(s). Momentum suggests worsening affordability.

Resale prices on a $/SF basis increased from $255/SF to $258/SF.

Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months.

Median rental rates increased $33 last month from $2,133 to $2,166.

Rents have been rising for 12 month(s). Price momentum suggests rising rents over the next three months.

Market rating = 8

Proprietary OC Housing News home purchase analysis

2657 PLUMB Dr Tustin, CA 92782

$615,990 …….. Asking Price
$468,500 ………. Purchase Price
3/13/2012 ………. Purchase Date

$147,490 ………. Gross Gain (Loss)
($37,480) ………… Commissions and Costs at 8%
============================================
$110,010 ………. Net Gain (Loss)
============================================
31.5% ………. Gross Percent Change
23.5% ………. Net Percent Change
85.0% ………… Annual Appreciation

Cost of Home Ownership
——————————————————————————
$615,990 …….. Asking Price
$123,198 ………… 20% Down Conventional
3.80% …………. Mortgage Interest Rate
30 ……………… Number of Years
$492,792 …….. Mortgage
$121,512 ………. Income Requirement

$2,296 ………… Monthly Mortgage Payment
$534 ………… Property Tax at 1.04%
………… Mello Roos & Special Taxes
$154 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
$155 ………… Homeowners Association Fees
============================================
$3,139 ………. Monthly Cash Outlays

($367) ………. Tax Savings
($736) ………. Equity Hidden in Payment
$157 ………….. Lost Income to Down Payment
$97 ………….. Maintenance and Replacement Reserves
============================================
$2,291 ………. Monthly Cost of Ownership

Cash Acquisition Demands
——————————————————————————
$7,660 ………… Furnishing and Move In at 1% + $1,500
$7,660 ………… Closing Costs at 1% + $1,500
$4,928 ………… Interest Points
$123,198 ………… Down Payment
============================================
$143,446 ………. Total Cash Costs
$35,100 ………. Emergency Cash Reserves
============================================
$178,546 ………. Total Savings Needed
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599……
sales@ochousingnews.com…..

We're sorry, but it seems that we're having some problems loading MLS # P827222 from our database. Please check back soon.

	$589,000 2614 BRAND Dr		0.16 miles 3 bd / 2.5 ba 1,638 Sq. Ft.
	$574,999 10758 CHURCHILL Pl		0.16 miles 3 bd / 2.25 ba 1,638 Sq. Ft.
	$634,900 10016 ALBEE Ave		0.98 miles 4 bd / 2.75 ba 1,805 Sq. Ft.
	$849,000 -		1.16 miles 3 bd / 1.75 ba 1,800 Sq. Ft.
	$739,000 12 ROBINS TREE Ln		1.19 miles 4 bd / 2.5 ba 2,050 Sq. Ft.
	$575,000 67 COPPER LEAF		1.22 miles 4 bd / 2.5 ba 1,900 Sq. Ft.
	$879,900 12455 HIGHLAND		1.68 miles 3 bd / 2 ba 2,086 Sq. Ft.
	$838,000 -		1.72 miles 3 bd / 2 ba 2,086 Sq. Ft.
	$809,000 1392 LUCINDA Way		1.88 miles 3 bd / 2 ba 2,116 Sq. Ft.
	$689,000 195 WOODBURY		1.91 miles 3 bd / 2.5 ba 1,700 Sq. Ft.