I’M NOT THE ONLY ONE WHO THINKS THERE MAY BE A DOWNSIDE TO RELAXED HOME MORTGAGE LENDING REQUIREMENTS
In my February newsletter I discussed the lowering of the down payment requirement for home mortgages backed by Fannie Mae and Freddie Mac. I questioned the impetus for that change and what it might mean for the housing market.
Now at least one government watchdog is questioning similar moves by the Federal Housing Administration (FHA). The issue with the FHA isn’t just lower down payment requirements. It’s also lower premiums for mortgage insurance, the result of which has been serious questions about the solvency of the FHA’s insurance program, and serious cost to taxpayers.
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