Affordability Crisis Brings About Questionable Lending Practice

It’s called the Affordable Loan Solution Mortgage and it’s offered by Bank of America. Only 3% down and the money need not come from the borrower. No financial reserves and no mortgage insurance required plus a FICO score as low as 660. Wow.

affordable_loan_solution_fact_sheet

Bank of America originates the mortgages through one of its sales channels. Once the loan is originated, Bank of America sells the loans, including servicing rights, to Self-Help, a credit union based North Carolina though with ties to Washington, D.C. through the founder’s control of Center For Responsible Lending.

Self-Help provides post-closing counseling for borrowers and designates the specialty servicing company who handles all loans regardless of future performance. Self-Help is taking the first-loss position and thus the loans require no mortgage insurance.

Freddie Mac then purchases all of the eligible Affordable Loan Solution mortgages originated via the Self-Help and Bank of America partnership.

I would love to know the funding source of Self-Help.

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