The Mess That Still Is Housing

Piece in yesterdays WSJ.

online.wsj.com/article/SB125211204270688031.html


If anyone was actually stupid enough to believe that lending standards have gotten better has to read this article. The lengths to which government will go to stabilize and keep going the ponzy scheme economy is truly breathtaking.

This article has to do with FHA Loans. Loans that are secured with down payments as low as 3.5%. This agency needs a bailout.

The depressing facts:

"At the end of June, some 7.8% of FHA-backed loans were 90 days late or more, or in foreclosure, according to the Mortgage Bankers Association, up from 5.4% a year ago".

What standards?

"Even as the FHA tightened lending standards moderately last year, Congress allowed the agency to make much larger loans, up to $729,750 in the highest-cost markets. Previous loan limits, at $362,000, had kept the FHA out of more expensive markets, including some of the hardest hit during the housing bubble. In July, California accounted for 13% of the FHA's mortgages, up from 1.5% in 2006".

Those housing numbers you have seen, the ones where housing sales are getting better? Which area of the country do you think they are referring to? The same areas where FHA type mortgages are soaring in.