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Mortgage broker 2000: Five attitudes to avoid

National Mortgage Professional
Jan 05, 2005

Down Payment Assistance Programs Aid LendersAnn AshburnDownpayment, DPA, down payment, downpayment assistance Lenders around the nation can benefit from using down payment assistance (DPA) programs in the home loan process. DPAs can provide lenders with a larger number of clients, and therefore increase their amount of business. People who may have been turned down for a loan due to a lack of funds can sometimes be approved for a mortgage when using a down payment gift. By increasing the number of eligible clients by using DPAs, lenders will increase the amount of loan approvals and improve their business in the long run. Using a reputable DPA is the key to success. You should choose a DPA that has been around for a few years and has a strong, reliable reputation. The DPA should have knowledge of the mortgage process, so it can work through the transaction without difficulty. The DPA should also utilize the latest technology to keep the transaction moving quickly, and a knowledgeable support center that can help with any questions that arise between application to settlement. Lenders should also make sure that the DPA is reliable. This is for the lender's own safety. The Federal Housing Administration holds the lender accountable if the down payment gift doesn't come from a reputable organization. The lender must be careful when choosing a DPA, or else they may be saddled with the cost of the down payment gift. Another key factor that lenders should keep in mind is whether or not the DPA has mortgage protection insurance affiliated with its program, such as a mortgage payment relief program that provides protection against the two most common threats to the borrower's ability to payshort-term disability and involuntary unemploymentand gives lenders greater protection when facing defaults. DPAs provide numerous advantages for lenders, including an increase in business, an easy transaction and protection against default. Furthermore, DPAs enable potential homebuyers to purchase homes they may not have been able to otherwise, because they lacked the lump sum necessary for a down payment. In other words, DPAs help more people realize their dreams of homeownership. Ann Ashburn is president and CEO of AmeriDream Inc. She may be reached at (866) 263-7437 or e-mail aashburn@ameridream.org.
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