Bill Zielinski of the Mortgaged Future blog worries a new Wells Fargo home-buying program could be “sowing the seeds for the next major crop of foreclosures.”
The bank announced a nationwide down-payment-assistance program this week, aimed at helping low- to moderate-income earners buy a home with less money paid up front. An honorable goal, right?
Zielinski doesn’t think so. He writes that buyers who pay zero-down are far more likely to default on their loans, and that Wells Fargo is practicing “financial lunacy” to approve mortgages that immediately put homeowners at a higher risk of foreclosure.
What do you think? Should zero-down loans be a thing of the past? Or is there a responsible way to lower the upfront costs of buying a home?