This should make Arnold Kling feel excellent:
“Buy new with $1,000 down,” the advertisement says, the words resting atop a trim green clapboard house offset by a bright blue sky.
[...]
The advertisement references a program initiated by the National Council of State Housing Agencies and Fannie Mae, the taxpayer-backed, government-sponsored enterprise that buys up mortgages from lending banks.
I’m pretty sure this one program offsets the entire financial reform package.
[H/T Ezra Klein]
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Thursday ~ August 5th, 2010 at 9:40 am
RickRussellTX
I just bought a house with an FHA loan at 3% down. When we asked our mortgage broker whether we should skip the extra federal paperwork and just get a private loan with a traditional down payment, the answer was no — private loans have higher rates and lower likelihood of approval even with a 20% down payment and lower principal amount, she said.
And apparently private companies don’t want my business, even though my gross income is about 3/4 of the price of the house. The system WANTS me to borrow more at lower rates.
Thursday ~ August 5th, 2010 at 1:23 pm
Rebecca Burlingame
I don’t get it. I just read this morning that our government is thinking about writing down some of the underwater mortgages, which would in effect bring down housing prices somewhat. Whereas this strategy only increases the costs of housing. Why would the government be throwing money at both directions?