Skip to comments.Is the Government Backing a New Housing Bubble?[FHA underwrites loans quadrup rate of 3yrs ago]
Posted on 05/14/2012 8:54:28 AM PDT by fight_truth_decay
ight now, the U.S. Federal Housing Authority is offering historically low interest rates on home loans as part of an effort to kick-start the housing market.
Under a plan introduced by President Barack Obama, an FHA-qualifying U.S. homebuyer can apply for a 30-year mortgage with a fixed interest rate of 3.75 percent and a 15-year fixed mortgage at 3 percent. FHA loans require as little as 3.5 percent of the homes value up front in the form of a down payment.
According to Edward Pinto, a resident fellow at the conservative American Enterprise Institute, FHA loans are allowing a repeat of pre-bubble history. Buyers with questionable credit are being given access to the housing market, creating uncertainty and risk. FHA continues to make loans that are very high risk and theyre not pricing them right, Pinto said. Theres no incentive to put down a larger down payment. It makes it difficult for the private sector to complete as they price rationally, as private banks cannot compete with irrational pricing.
(Excerpt) Read more at thefiscaltimes.com ...
FHA became a subprime lender after Freddie and Freddie went down.
WOW that’s some mighty long debt slavery strings right there.
If you want to buy a home at age 30, it won’t be paid off til you’re 60??!!
Well I guess it keeps you indebted longer..all the while having to pay off the Obama, Pelosi and Reid $ Trillion dollar spending spree’s.
I feel bad for those starry eyed youths applauding Obama, so.
When we bought you had to have a minimum 0f 30% down and interest on a 15 year mortgage was 9.25%.
The system is unrecoverable at this point.
America is at that awkward stage; it's too late to work within the system, but too early to shoot the bastards."
- Claire Wolfe
Last week my daughter and family sold their house in Oakville, Ontario, Canada. The house was on the market for less than a week. Fourteen interested buyers. More than one offer for the asking price of around $500,000. They sold for $12,000 above their asking price.
They picked a great time to move back to America, huh?
Would refinacing be in this mix or are these new home loans? A friend is a RE appraiser and he is super busy due to the refinacing and I believe new home sales are good in our area.
I’ve been looking for months now. Everything I’ve offered on has had a better offer, and I’ve never offered less than asking + 1/2 closing.
And thats’ not all ... the USDA is doing the same thing for ‘rural’ areas. Rural does not mean it has anything to do with agriculture or food production ... just that there is low population.
Exaclty!!....They need to get you nailed down in a house so they can tax the hell out of you to support redistribution of wealth. FUBO!
This makes no sense... I purchased inexpensive units within my means, stayed current on payments and get shafted compared to folks who overbought and outside their means?
Bought my first house at age 32 in 1990, a new smaller split entry with an unfinished walkout for $76k in nice Twin Cities area. Normal rates were 10% but I qualified for First Time Home Buyer at 7.5% with 3.5% down and rolled in closing cost with total mortgage of $78k. Twelve years later house later sold for $140K.
After two divorces I bought again three years ago. A 15/yr old bank owned townhome in the same area for $85k that was selling for $150k five years ago. My FHA fixed rate is 5% plus MIP. My credit rating is excellent but I cant get the same good deal to refinance as folks who are behind and underwater. This makes no sense!
Meanwhile Coal production is down to '95; HT to @SalenaZitoTrib; as is natural gas production.. #jobs. Cities have the infrastructure, while "the rural mouse" still pays through the nose. But we have a lot of nice "pretty" new roads although we can't afford the gas to travel them on.
[Via PostMaster friend age mid 40] Post Offices that were under possible closing alert; will now remain open; but PostMaster hours are being cut some in half, a push for entry-level-pay postal employees. He's been taking real estate classes just in case-
I will also add for the first time the "plunge" of gas prices [not the usual penny or two dip] caused gas stations in my area [NE] to run out of Regular-whereas I had to find another station which also nearly out [reg]-I found one pump out of 4 @that station. Carter flashed to mind.
Remember our troops through all this madness.