As if this is going to come as a surprise, the FHA is in need of a bailout and guess who's going to provide it?
It didn't take a rocket scientist to know that this was coming, the FHA has become the new subprime lender in this country offering loans that are effectively 100% (no down payment loans) and many times the loans are made to people with less than perfect credit. The FHA even has a refinance program that allows a refinance up to 125% of LTV (loan to value) and I've been told there is no credit check for this if the refinance is being done on an FHA existing loan.
Housing is continuing to kill the economy and the current programs to address it are not working (modification, monetization and more sub-prime type lending). We need a real solution, its starts with sound lending, sound money and a program to put an end to the foreclosure/mortgage crisis that is worse today than it was a year ago.
The solutions are out there, I've even written about them.
Scott Dauenhauer CFP, MSFP, AIF
Edward Pinto Testimony
