{"id":190885,"date":"2009-10-17T22:18:00","date_gmt":"2009-10-18T03:18:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/10\/17\/when-policy-creates-stupidity\/"},"modified":"2009-10-17T22:18:00","modified_gmt":"2009-10-18T03:18:00","slug":"when-policy-creates-stupidity","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2009\/10\/17\/when-policy-creates-stupidity\/","title":{"rendered":"When Policy Creates Stupidity"},"content":{"rendered":"<p>David Stevens, HUD\u2019s Assistant Secretary of Housing and Federal Housing Commissioner, basically the head of the Federal Housing Administration, has <a href=\"http:\/\/www.thetruthaboutmortgage.com\/fha-chief-fights-off-higher-down-payment-requirement\/\">drawn a line in the sand against legislation increasing the minimum downpayment for an FHA loan from 3.5% to 5%<\/a>.<\/p>\n<p>This is the same FHA, that has had its reserves sucked dry by increasing defaults on its mortgage (<a href=\"http:\/\/40yrs.blogspot.com\/2009\/09\/first-comes-denial.html\">here<\/a> and <a href=\"http:\/\/40yrs.blogspot.com\/search?q=denial\">here<\/a>), and now they are fighting against making their loans less likely to default.<\/p>\n<p>The reason given?  That, &#8220;limiting the pool of eligible home buyers could dampen a fragile housing recovery.&#8221;<\/p>\n<p>This is an extension of two largely bipartisan policies:<\/p>\n<ul>\n<li>The federal government has been pushing home-ownership aggressively for decades.<\/li>\n<li>A desperate attempt to re-inflate the housing bubble.<\/li>\n<\/ul>\n<p>Both policies have proven disastrous, but decisions are still being made on this basis.<\/p>\n<p>It should be noted that this is the same FHA was spitting in the face of sanity for some time by allowing &#8220;seller funded downpayment assistance loans&#8221;, where the seller raised the price of the home in order to lend the buyer the money for the downpayment (!).    It was called the Down-payment Assistance Program (DAP).<\/p>\n<p>This procedure is one of the reasons that they are in a pickle now, because it made it too easy for people who could not afford house payments to buy a house.<\/p>\n<p>Thankfully, Congress made this illegal, and they are now looking at a further tightening of lending standards, but just as in the case the DAP, they are fighting the change tooth and nail.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>David Stevens, HUD\u2019s Assistant Secretary of Housing and Federal Housing Commissioner, basically the head of the Federal Housing Administration, has drawn a line in the sand against legislation increasing the minimum downpayment for an FHA loan from 3.5% to 5%. This is the same FHA, that has had its reserves sucked dry by increasing defaults &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[998,1004,1020,1088,985],"tags":[],"class_list":["post-190885","post","type-post","status-publish","format-standard","hentry","category-congress","category-finance","category-legislation","category-real-estate","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/190885"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=190885"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/190885\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=190885"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=190885"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=190885"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}