Here we Go Again...

[phil43 0]

For Sale: Homes, Cars -- No Money Down! (Again)

Posted Jun 24, 2008 10:52am EDT by Aaron Task in Investing, Recession

Related: GM, F, TM, LEN, KBH, TTM

Seeking to stem a steep decline in sales, GM is reviving the "zero-percent" financing strategy that helped boost sales earlier this decade. With Ford also in desperate straits and even Toyota scaling back its U.S. sales forecast, it probably won't be long until "no money down" becomes the industry standard again.

 

In separate but related news, The Wall Street Journal reports "no money down" financing is also making a comeback in the housing market. Thanks to nonprofits that are funded by homebuilders and private homeowners, buyers can get their down payments funded and then qualify for FHA-insured loans -- meaning U.S. taxpayers are ultimately on the hook for these loans.

 

Just like the automakers, homebuilders like Lennar and KB Home are saddled with huge inventories of unsold homes, so the strategy makes sense for them. But whether zero-percent loans will revive sales of either homes or autos is debatable. Unlike in 2001-02 consumers are retrenching, and many have (hopefully) learned the lesson that there's ultimately a price to pay for all this "free money."

[MichaelC 160]

I was under the impression that if you put your hand in a pot of boiling water and were burned, you'd know enough not to do so again.

Is the mortgage industry really that foolish? Can GM be that desperate?? All we need now are gas company credit cards with no payments until 2010 and I'm gettin' me a Hummer!

[-Tony- 0]

I was under the impression that if you put your hand in a pot of boiling water and were burned, you'd know enough not to do so again.

 

Geez Are you S L O W or what, you kick it over so you can have what you want "now" with no consequences?