Wednesday, November 18, 2009

US Federal Housing Association Draws Fire

FHA-Backed Lending Is a ‘Train Wreck,’ Toll Says

"The Federal Housing Administration, the agency that insures home purchases made with down payments as small as 3.5 percent, may create another lending crisis, Toll Brothers Inc. CEO Robert Toll said. “Yesterday’s subprime is today’s FHA,” Toll said today at a New York conference for builders sponsored by UBS AG". The FHA said 456,000 of its loans, or 8.2 percent, were in default as of September 09. That was up from 5.6 percent in September 2008.

Posted by alan @ 08:55 PM (717 views)
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One thought on “US Federal Housing Association Draws Fire

  • FHA was created for hard working Americans to be able to own a home with as little as 3.5% down. I am a Realtor and have several buyers in full time careers making $60,000 to $80,000 supporting themselves and their families. With monthly living expenses and tax / social security costing so much, most of their paycheck keeps them floating from month to month. Being able to save the 3.5% is a big accomplishment knowing they can own something and pay close to what they are paying while renting.
    Are we encouraging the Rich to Get Richer here by keeping the middle class american family renting and paying other peoples mortgages (hence investors etc.)?
    FHA projects available are slim pickings due to HOA restrictions.
    Why should Occupancy ratio stop a first time homebuyer owning and building on their financial wealth with homeownership????? They would be paying property tax (contributing to local schools & community), making money with real estate investment or possible move up to bigger more expensive home in future for their family. Are we trying to keep them from this Equal Housing Opportunity by these restrictions. Why can’t the FHA loan qualify them for Homeownership and forget the HOA ratio issue???

    Price range for these first time buyers is usually in the low $200,000 range. The Condominium projects in this price range will not accept FHA due to HOA occupancy ratio being low with Owner Occupied. Soooooo We are encouraging only CASH buyers (investors) limited amount of buyers to purchase these condos at a lesser price and then continue to rent them out.
    How is this a Win Win for boosting the Housing Market ???????????????????????????

    Kelly Burch – Realtor in San Diego

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