News From The Front: House Passes HR 1852

House passes HR 1852. This raises the limit for FHA mortgages, appears to lower equity requirements (to less than zero) in certain circumstances, lowers their mortgage insurance ceiling. It also lowers the credit score minimum, and prohibits failures to pay from being reported to credit reporting agencies.

CBO report here, which quite frankly looks like a whitewash. You're making it easier for people with credit way below average to obtain financing for which the government is going to be liable, and giving them more favorable terms, to boot. Maybe I missed the part where they clicked the ruby slippers together three times and said, "There's no place like Oz!" (yes, I'm aware that's not the original quote)

Maybe it will straighten everything out before anything worse than what's already happened, and like the beginning of one of the episode of Hitchhiker's Guide to The Galaxy, where the illustrate the illumination of the ultimate question to life, the universe, and everything (which the Vogons blew up before it could be communicated), really nobody will have to get nailed to a cross this time. Nevertheless, I'm thoroughly skeptical.

As a loan officer and real estate agent, this is going to make a very positive difference to my business.

As a taxpayer, here we go with multiple high speed stainless steel counter-rotating shafts, which we're all going to pay for, while those who entered the biggest transaction of their lives without any research are all going to benefit from. As tens of thousands of loan officers and real estate agents who've been setting their clients up breathe a huge sigh of relief.

At first glance and first thought, this appears to be a very poorly thought out and poorly targeted bill. Yes, it's going to save a lot of people, the consumers of which I'm glad of. But it appears to heavily reward severely irresponsible behavior by insulating those practicing it from the consequences of their actions, thereby encouraging more of the same. This is the sort of heavy-handed vote buying that I'd expect from a nascent communist state.

Considering my own individual interests, I'm all in favor of this bill. Considering those of the country as a whole, I find myself hoping the Senate has the intelligence and intestinal fortitude to produce something better. Right now, it's not looking good. There's no way the minority Republicans can filibuster this politically, and the Democrats look like they're ready to run off the edge of a cliff with it. The best hope of fiscal sanity is the President vetoing it (which is probably the funniest joke you've hear today, but there's more chance of that than anything else stopping it).

Reno Realty asks "Maybe I'm missing something here, but if distressed homebuyers can't afford the homes they're currently in, how does making it easier for first-time home buyers to purchase more expensive homes "return stability to the mortgage market"?" (The answer is in economic aggregates, of course, but it's a good point in the context made).

National Taxpayer's Union
recommends a "No" Vote

an apparent foreclosure and short sale specialist doesn't like it either - of course a foreclosure interests as an individual align perfectly with those of taxpayers, here, but the sentiment is correct "Trying to turn FHA into an ATM".

Seattle Real Estate Professionals do note that the President did at least refuse to support expanding the conforming loan limit.

The builders are happy (predictably) with the passage.

Honeycomb Properties sees good and bad.