From FHA, to ship bad loans back to their originators while insisting on better risk management and higher down payments.
It’s precisely what should have been done in Dodd-Frank.
Alas, the Know Nothings now run the House, so the chances of this being passed are pretty much zero. They like their local banksters and mortgage fraudniks even more than Democrats.
Gorilla says: “Proposals are good, action is better!”
FHA’s capital is being depleted rapidly, as the rate of borrowers now 3 months behind on their loans has jumped from 6 to 9%.
Congress requires that FHA have at least 2% in capital reserves to meet the possibility of increasing foreclosures. In the most recent report, FHA had only 0.53% in reserves. New fees are promised, lending standards will be tightened, horses will be led back into the barn: you know the drill!
So, the number of foreclosures is likely to continue rising, the FHA will be back for more cash from Uncle Sam, and house prices will continue falling.
Eventually, supply will meet demand at the bottom, perhaps by 2011-2012.
Gorilla says: “Sadly, an FHA a day keeps Obama in play!”
Not adequately reserved, the FHA insurance fund!
Insuring all those bad mortgages, and all the bad ones yet to come, is a pretty easy way to go bankrupt in the mortgage insurance business!
Gorilla says: “It’s All You Can Lose And The Taxpayer’s The Buffett!”
