Federal Housing Administration to run out of money for first time ever

Very bullish is it not?

The Federal Housing Administration could exhaust its reserves over the coming year, according to budget projections released Monday, which would require a Treasury infusion for the first time in its 78-year history.

FHA is doing it's best to grow the housing bubble again... by letting anyone have credit to buy a house...thing is, too much people are defaulting and houses prices are plummeting so the 3.5% money down they are asking is not enough to cover the losses...

And with Obama wanting to give anyone a house or anyone being able to refinances makes it even worse in the end... if the bubble was allowed to pop, more people would be able to afford houses since the average price would go to a NORMAL level without all this artificial inflation...

1. Let the bubble pop
2. Ask 15-20% down-payment on the house
3. Housing Market goes back to normal and STAYS there.

Gimmee my bama house, my bama fone, and my check.

I actually read a very interesting article awhile back that suggested much of what you are saying:
-Yes, housing values have dropped. Bummer for those of us with houses, but an opportunity for others who now can find affordable housing.
-We need to return to the days of more money down. If you can't afford to put that much down....rent until you can save up.

I wish I could find that article, but it's been too long and I can't remember where I saw it.

I am currently shopping for my second home.

I have a substantial down payment (20-25%) and am purchasing a second home as an investment (buyer's market, folks!).. I mention this to give an example of the PROPER way to purchase a home.

These idiots getting homes at 3.5% down are typically losing tens of thousands in interest over the course of their loan. These loans aren't good for the consumer - and the solution really is to just let the market alone to recover on it's own. More often than not these low down payment loans are adjustable rate.. That means when the FED raises the Prime Rate (an inevitability within the next couple of years) your crappy 8% APR home loan becomes a REALLY CRAPPY 15% APR loan..

Banks LOVE these kind of customers because they have an opportunity to make a metric **** ton of money off the higher interest. If the home owner defaults, the banks repossess the property and sell it again. The bank can also claim this as a loss on their books, get a nice tax credit for it, and still retain the property. Banks stand to make a fortune getting people into homes in today's market, pulling the carpet out from under them when the market recovers and home values return to normal. With this cyclical earning potential it's no mystery why banks are willing to take risks on bad credit buyers.

Consumers need to educate themselves and stay away from these predatory loans. You are almost selling your soul when you get a non-traditional home loan. Buyer beware! For the amount you are spending in additional interest you could pay off your bills, repair your credit, save up a down payment, and get into a home YOU WANT at a reasonable rate and with a greater chance of successfully keeping the home.

reply to post by Vitchilo


Housing in general is exclusive to independent markets. Some markets have clearly hit their bottoms, in others there are still major issues. The market I'm in has dropped 50% from it's peak .. and still dropping. There isn't really a rational reason other than banks are refusing to put their entire inventory on the markets. So what happens is that in neighborhoods where houses start selling the banks are like hey, houses are selling, the next week there are moving trucks up and down the road rushing furniture into houses that were empty, then forsale signs by the end of the day. When walking my dog I walked up to one of the windows, very nicely furnished by a stager to make the house more appealing. (this is something they started doing back in December) .. it's causing house prices around here to continue to fall as banks are taking pennies on the dollar for the houses. As of right now on my street I have 5 vacant houses (3 now staged), 3 in foreclosure, 2 rentals in foreclosure and 4 houses for sale. I don't see me being able to move for a long long long time lol.