Holden Lewis of Bankrate’s Mortgage Matters lets loose this week on Congress’s plan to “improve” the Federal Housing Administration.
He’s not happy.
This week, the House passed H.R. 1852, known colloquially as “FHA modernization” and officially as the “Expanding American Homeownership Act of 2007.”
Because, you know, today’s high mortgage delinquency and foreclosure rates are a sign that we need to expand homeownership and denigrate renting.
The bill was the idea of Reps. Maxine Waters of California and Barney Frank of Massachusetts, a pair of reliable liberals who ought to know better. It calls for:
* Zero down payments on FHA-insured mortgages.
* Rescuing subprime borrowers who are at risk of foreclosure.
* Raising the FHA loan limit to almost $850,000 in the most expensive markets.
I know what you’re sputtering: “But … but … but we got into this foreclosure mess because so many people got huge mortgages without making substantial down payments,” you’re saying, red-faced. Hey, I’m just reporting the news, not making it.
The Mortgage Bankers Association’s chairman says: “The FHA is a critical partner for industry that needs to be revamped, which is why FHA modernization has long been a top MBA priority. The FHA is an important tool that can help some distressed borrowers who are having trouble paying their current mortgages avoid foreclosure.”
An even better “tool” would have been a rubber stamp that read, in big, red letters, “Loan Denied.”
That pretty much nails the issue.
(Holden, sorry for copying so much of your post, but it was just too good to leave anything out!)
Source: Mortgage Matters – By Holden Lewis, Bankrate.com (second item)
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