Monday, April 8, 2013

FHA Wants to Give Loans to Riskier Buyers

The  Federal Housing Administration (FHA) is said to be working with the White House to create “new policies” to encourage lenders to offer high-risk loans. The FHA is already in a pickle, but the White House wants it to go deeper in the hole. Many housing analysts feel that these kinds of policies were the reason for the 2008 financial collapse.

The U.S. Department of Housing and Urban Development (HUD) reported in November of 2012 that the FHA’s Mutual Mortgage Insurance Fund’s capital reserve ratio “fell below zero to negative 1.44 percent.” This is a potential problem.
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