Obama slashes mortgage insurance premiums for subprime borrowers


With just ten days to go, Obama adds a little time bomb into the housing market. It’s as if we have learned nothing about the housing bubble and subprime borrowers. In case anyone may have forgotten what this election was about and why we may have dodged a bullet, I give you this story.

subprimeWhat do you do when a quick rise in mortgage rates suddenly threatens to tame home buying demand from subprime borrowers who, despite the lessons from the past, are still purchasing homes, en masse, with only 3.5% down payments and just enough monthly cash flow to cover mortgage payments?  Well, if you’re the Obama administration then you simply socialize the problem and force those higher mortgage costs on taxpayers.  Anything less would just be a hateful attempt to deny minority and low-income citizens their “right” to home ownership.

And while the Obama administration isn’t directly passing out tax dollars to subprime borrowers to make their monthly mortgage payments, its recent decision to lower the FHA’s annual mortgage insurance premiums by 0.25% is essentially the same thing since tax payers are still on the hook for the same risk but receiving lower premiums in return.  Per Bloomberg:

The FHA doesn’t make mortgages. It sells insurance, paid by borrowers, on loans protecting investors in case of default. The program allows borrowers to get a mortgage with a down payment of as little as 3.5 percent and a credit score of as low as 580, on a scale of 300 to 850. That makes it one of the most forgiving mortgage programs and popular among first-time home buyers.

Some in the real-estate industry have been calling for another fee cut and heralded Monday’s move.

“Dropping mortgage insurance premiums today will mean a whole lot more responsible borrowers are suddenly eligible to purchase a home through FHA,” William Brown, president of the National Association of Realtors, said in a statement.

The FHA last cut premiums two years ago. That cut, which came as rates dropped and lowered the annual fee for most borrowers to 0.85 percent from 1.35 percent, led to a wave of refinances.

More at Zero Hedge

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15 Responses to “Obama slashes mortgage insurance premiums for subprime borrowers”

  1. Just Simply Linda Says:

    Breaking news;Senate confirms Mattis waiver 24-3 .😊

    Liked by 1 person

    • bunkerville Says:

      Big Smile Here!!!

      Liked by 1 person

      • Just Simply Linda Says:

        And the full waiver was just approved…☺Oorah.

        Liked by 1 person

  2. Sparky Says:

    This has truly rendered me speechless. [shaking my head in disgust] O’Blamer is an evil, wicked, mean, nasty, yuck, pooey person.

    Liked by 1 person

    • bunkerville Says:

      I don’t think you left anything out Sparky. Excellent description.

      Liked by 1 person

  3. Mustang Says:

    If you haven’t seen the film “The Big Short,” it is a must see. Considering the cost to the American taxpayer for this debacle, take a guess: how many of those scoundrels went to jail for their criminal behavior? Go ahead … make a guess.

    Liked by 3 people

    • bunkerville Says:

      I have too many fingers Mustang to give the number. I will have to check it out. No, haven’t seen it.

      Like

    • Mustang Says:

      The number of people who went to jail was ZERO. Yes, you should see the movie. Quite well done and factually based.

      Liked by 2 people

      • bunkerville Says:

        My being obtuse and clever meant to signal thus… and Eric Holder extorted hundreds of millions from the banks and put it into his slush fund and gave it to Acorn and the like. I did a number of posts on the outrageous behavior.

        Liked by 1 person

  4. Brittius Says:

    Reblogged this on Brittius.

    Liked by 1 person

    • bunkerville Says:

      Thanks again.

      Like

      • Brittius Says:

        You’re welcome.

        Like

  5. Just Simply Linda Says:

    {{thunk}}}– I’ll just go run out and buy a house now….sigh. (being sarcastic—like we can afford NY’s high taxes…geesh) No thanks…

    Liked by 1 person

    • bunkerville Says:

      I am happy to be done with owning a house. It is someone else’s headache at this point.

      Liked by 2 people

      • Just Simply Linda Says:

        yep….I hear ya…we haven’t owned a house in like 6 years…long story on why……

        Liked by 1 person


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