Relevant:
- 30% of FHA Foreclosures Linked to Downpayment Assistance
- FHA's Stevens Reports: Downpayment Assistance May Wind Up Costing the FHA $13.6 Billion
- Is Seller Paid Down Payment Assistance Coming Back?
- Housing Push for Hispanics Spawns Wave of Foreclosures
- Melville company offers controversial $1,000-down mortgage
2008-04-09 — iamfacingforeclosure.com
Although both Democrats and Republicans are looking to the FHA to rescue homeowners in trouble, there is some question as to whether or not the agency is equipped to deal with the foreclosure crisis.
By its own estimates, the FHA will be operating in the red this year. Congressional officials are projecting a $1.4 billion shortfall in fiscal 2009 for the agency. If this happens, American taxpayers will be forced to subsidize the FHA for the first time in its 74-year history.
Ha ha! Get used to it, people. If you want to have bailouts, they will now be flat-out welfare; by which I mean taxpayers will pay -- there will be no "money making" bailouts for the government.
The juiciest part is the outright proof that FHA is just another subprime program (which is why it is losing money and will continue to lose more, the more it is utilized):
Some housing officials are now blaming the bad ink on an FHA program that allows seller-financed down payment loans. Under the program, sellers arrange to cover buyers’ down payments. The seller concessions are generally added to the total cost of the loan.
Only 2 percent of FHA insured loans were seller-financed down payment loans in 2000, but they grew in popularity during the boom and the FHA did nothing to keep the program in check. By 2007, seller-financed down payment loans accounted for a whopping 35 percent of all FHA loans.
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