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FHA bailout adds to 'existential threat', Republican congressman claims

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Mortgage Professional America | 30 Oct 2013, 05:21 AM Agree 0
A Republican congressman has taken aim at the FHA bailout, saying it heaped money onto the national debt spurring an "existential threat"
  • Kent Kelso | | 30 Oct 2013, 08:52 AM Agree 0
    Logic says run FHA like any insurance pool pricing for risk.
    Example: If a person who just graduated from collage, started their career and can make the monthly payments with reasonable 38-45% total DTI, has a 727 mid score but has no Downpayment and needs a gift from family, hence the FHA mortgage vs Conv. This borrower should be rated at 50-55 basis points annual vs the 135 now! Prudence on their part says wait or rent because the FHA MIP is TOO HIGH. If a person with similar DTI but a 620-640 mid score and less financial stability who otherwise qualifies for the program via TOTAL SCORECARD SHOULD PAY the 135 basis points and there should be tiers in between. If this is not the case you are assuring that FHA pool will be loaded with lesser performing mortgages with nothing to offset them. This make no good business sense. This is typical Business by Government mentality! It's ok, well just printore money!!!
    The program is great and necessary, just needs to be treated more like a business!
  • Dave Mattull | | 30 Oct 2013, 10:25 AM Agree 0
    Kent, You make entirely too much common sense for our government to understand what you just said.. You should be receiving phone calls from some of the govt officials who make these stupid rules and ask you to explain business insurance 101 to them..
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