2012-12-06doctorhousingbubble.com

The FHA capital reserve fund is now deep in the red to the tune of $16 billion. So what is the solution? Instead of rethinking the idea of 30x leverage loans, the FHA is putting the screws on recent buyers by hiking mortgage insurance premiums. Upfront the FHA will eat up 1.75% plus 1.25% in ongoing MIP payments. This is massive. In California on a $500,000 loan this is $8,500 upfront and $500 a month. And get this, the FHA is looking to make the annual MIP permanent!


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