New Loan Products: Good or bad for banks and/or the real estate market?

Folks,

Picked the Wall Street Journal up off the driveway this morning to find an insert from one of the many new Atlanta condo buildings coming on-line in the near future. Title of the insert:

“Atlanta’s premier luxury condos. We take the risk, you enjoy the lifestyle.”

The ad goes on to describe “a remarkable new financing program that makes luxury condo buying safer and more secure than ever.” The program includes:

– Three-year Equity Protection Pledge – a seller financing program that guarantees your equity
– 5% down payment option – move in now while selling your existing home
– Low 4% interest rate option
– Additional financing option include a mortgage amnesty feature and job loss protection

The market for condos in Atlanta isn’t much better than it is in Miami, so these guys are desperate to sell. Some of the risk is borne by the seller, but somewhere there is a bank on the hook – whether it’s the seller’s bank, the bank the seller is working with to provide these loans (however subsidized), etc.

I am not a banker per se, so my questions to those of you who are: who is really bearing the risk (assuming it is truly offloaded from the end buyer), and is this a good thing or will it just delay the inevitable (continued negative HPA, bankruptcy for the seller, losses for the bank, etc.)?

Thanks for reading.