From the Post:
"The Federal Housing Administration has been hit so hard by the mortgage crisis that for the first time, the agency's cash reserves will drop below the minimum level set by Congress, FHA officials said.I don't have a whole lot to add to this one, except the obvious: are any of us surprised?
. . .
"It's very serious," FHA Commissioner David H. Stevens said in an interview. "There's nothing more serious that we're addressing right now, outside the housing crisis in general, than this issue."
19 comments:
The question should be who's NOT out of money?
Robert,
My thought exactly. Why would FHA fair any better than other Lenders?
contrarian,
really, who is claiming or pretending "everything is fine"?
Contrarian--
Most of the housing pundits, inside government and out, pretend everything is just fine.
I agree with you on this point, this one time. (Let's not make a habit of that.)
There is a lot of whistling past (or through, or back toward?) the graveyard. Why? Because there's money to be made in that, by the investing elite, from the unwashed herds who can ill-afford it.
I thought CR's comment on this was succinct and pithy. Their projection for returning to a healthy position in a few years is based on housing prices appreciating (unclear how much).
"Yeah, if house prices increase, everything with be OK!"
We're back to 2006-2007 thinking.
At most, the comment's are slightly encouraging with many caveats. Really, does anyone here, that watches a variety of economic news, believe the majority think everyone is fine?
Let's not cherry-pick.
Cara, this seems like it would be a good product for you.
Fifteen-year fixed-rate mortgages averaged 4.47%, down from 4.5% last week and 5.35% a year ago. The mortgage rate is at its lowest since Freddie Mac started tracking it in 1991.
Hmm, sometimes I wonder . . . . last night I saw a place on frankly sold Sept. last year for 257.5 . . . short sell now for 239.9.
Only 17.6k difference between last year and this year (for whatever reason they have to sell) and they have to short sell.
That is why we need 20% down, none of this phony 3.5% FHA which remains a huge part of the market.
10% is 25.7k, 20% is 51.4k. Considering how hot things are right now, it will prob. sell @ 239 . . . but if they had put 20% down at least they could go to ~210 without getting into trouble.
But then again, why would anyone every want to put any money on a house. I mean if you have to sell it for less than what you bought it at just do a short sell, or live there for >6 months free let it go into foreclosure and then let the taxpayers bail out the banks. Paying anything off is a thing of the past, rack up the debts and then default.
/snark off.
Robert,
Yeah, we've been debating 15 or 30 since the whole process began. What we're buying with the 30 year is the piece of mind of being able to choose a low payment if need be for any extended period of time. It's expensive piece of mind, I agree. And when/if we hear back a price from the seller's bank, depending on the interest rates at that point we may chose the 15, since technically, yes, I can afford it on just my salary. Not comfortably, but it can be done. But we'll be pricing out that versus points when the time comes. The big virtue of the 15 year is getting that rate without a lot of upfront points.
gte,
Wow! Just wow. that's ridiculous, having to do a short sale for that small of a loss. Just crazy. One would assume that will be a loss to the mortgage insurer, unless there was fraud in the application which may very well be the case.
But really why would anyone put skin in the game, just to add insult to injury if have to give up the house for some reason?
(says me who's putting down 20 because I hate paying any extra fees ever)
Hey Cara,
I would love a 15 year mortgage. Owning a home free and clear after 15 years is a beautiful thing.
Say you went with the 15 year. And three years from now something happens and the payments are too high for your income--couldn't you refinance back into another fifteen or twenty year mortgage? You will have paid down principal and will have equity in the property.
Meshell,
One could yes, but paying the upfront costs of refinancing when one is under financial duress, into a market where the rates won't be 4.75% any more doesn't seem like an attractive back-up plan.
Thus our nominal plan of getting a 30 year mortgage that's under 5.5% anyway (which is really nothing to sneeze at) and paying it off at the 15 year rate (it's not like I can't work an amoritization table myself) with the built-in "refinancing" option of paying less when under duress without any upfront costs, seems like the best solution if the payment on the 15 year rate would be onerous under one salary.
We may go with the straight 15 year though, we only have another year on the car loan (3 yr loan) after which paying for everything off one salary would be do-able even at the 15 year rate. Not a lot left over for non-retirement savings and less seafood in our diet, but we wouldn't expect the lack of income to be permanent.
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