FHA: Federal Housing Authority Low On Cash, High On Leverage

wsj.com:

The Treasury has announced new "capital cushion" requirements for financial institutions to reduce excessive risk and prevent taxpayer bailouts. Seems sensible enough. Perhaps the Administration will even impose those safety and soundness standards on federal agencies.

Read the whole story: wsj.com

Comments

[tjfxh]

10:58 AM on 10/01/2009

The sad fact is that housing is still way over-priced, so that if the FHA and Fannie weren't providing Ponzi financing, the market would collapse to realistic levels, wiping out trillions in paper wealth and creating a mountain of toxic debt that couldn't be repaid, and an avalanche of mortgage defaults.

[thePOlitkalkos]

09:45 AM on 09/30/2009

Where is the change, Obama? Where is the REFORM?

Job loss equates to home loss No jobs, no recovery. Why so many people out of work even with the stimulus spending? Why are more jobs still being shipped overseas? There is no such thing as a jobless recovery; that is n3ocon jargon.

good articles... http://www.iamned.com

meanwhile, the stock market is surging and everyone is too busy to counting their money to show any initiative.

[xilduq]

11:03 PM on 09/29/2009

Obama, the Fed, et al have done nothing but keep the Ponzi scheme portion of the economy from collapsing now. ALL Ponzi schemes must collapse due to mathematical constraints. The question now is: when?

[olephart]

07:18 PM on 09/29/2009

The FHA and the Obama Administration are desperately trying to shore up plunging home values. Never mind that they are still overpriced in many areas and anything that delays their prices to returning to traditional values only postpones the inevitable. Other programs to save itinerant homeowners are also being played out. The first time home buyers subsidy is another example of this. The fact that the FHA is using questionable lending practices only serves to illustrate how unwise these actions are.

Seeing that we are all taxpayers these policies cannot be for the greater good. One must look beneath the surface that however tragic an individual situation is the primary motivation for this largess is to make the banks whole. They are the ones holding the mortgages. By backstopping their assets the Government directly subsidizes the banks. They’ve already purchased trillions of dollars in bad securities from the banks and now they are shoring up the rest.

We are on the hook for these debts. Bush, Obama and both Parties have stolen our financial futures for the criminally wealthy. None of the bailouts were necessary, after the initial shock, Lehman was quietly taken apart and sold. So with the other institutions, their banking functions could have been transferred to other entities as have been 95 other banks this year. The shareholders, bondholders and the malfeasant overseers would have taken the losses, not the taxpayers.

[PhilipTaylor]

05:00 PM on 09/29/2009

It is time to RETURN TO OUR TRADITION!

For 50 years before Reagan the TOP TAX RATE hovered between 63% (1932) to 94% (1945) to 70% (1982).

As Reagan used to say on his Western Show on TV in the 50's, "Lets return to those days of yesteryear" and in this case lets put in

A Top Tax Rate of 70% on all Gross Personal INCOME over $3 Million, the Discretionary income NOT necessary to survive and prosper!

[hypnotoad72]

05:30 PM on 09/29/2009

I just want ethical reform.

If China and other countries are right about starting over with a one-world currency and the rest of it, where people put in quality time to make quality goods and services and, in return, get a quality wage so they can buy said goods and services, and get education, without needing to go into debt. 50 years ago that was possible. These days, that's impossible, regardless of what those who appease the "self-responsibility" tropes say. For those people will find ANYTHING to spin into "You were not responsible, wah wah wah", one way or another.

I may as well program a macro key with every solid link to direct evidence, not like those same people would read them anyway...

[jsarets]

05:40 PM on 09/29/2009

It's important to emphasize that when the top rate was upwards of 90%, it didn't kick in until the present-day equivalent of about $10 million of annual income.

Today the top rate kicks in at $250,000. We don't want a substantial rate increase in this bracket. What we really need is higher brackets, for example $1 million and $10 million brackets.

It's not really a progressive income tax if the progressiveness stops at the upper middle class and doesn't continue through the rich end of the pay scale.

[PhilipTaylor]

05:55 PM on 09/29/2009

Look at table below and you can see your $10 Million is BS!

$200,000 to $400,000 Dominate time frame!

Perhaps $3,500,000 but $3,000,000 is close enough!

A Two Tier Top Rate should be considered!

70% on Gross Incomes over $3,000,000
91% on Gross Incomes over $8,000,000

[Jaywalkker]

04:15 PM on 09/29/2009

Look! Up in the sky...!

Its a bird! Its a plane! Its our falling economy!!

[joelaf]

04:00 PM on 09/29/2009

My origanal home loan was FHA. Before my first payment was due, they sold it. My first year of ownership, my mortgage was sold 3 times.

[jsarets]

04:57 PM on 09/29/2009

Consider yourself lucky. Many homeowners aren't even notified when their mortgage bond is sold or securitized. In about one-third of foreclosures, the bank can't even produce the note.

[hypnotoad72]

05:31 PM on 09/29/2009

Ugh. Banks and companies rail on consumers, but here they are being twice - if not more - as irresponsible? Yet THEY are the ones bailed out? Good bloody grief!!

[Azuki]

09:50 PM on 09/29/2009

FHA is probably still the investor (entity that paid for the loan and holds the note) on your loan. The loan probably just got bumped around until it made it to a large servicer (entity which sends out statements, collects payments, provides customer service, etc. for the investor). If you call your current servicer and ask who the investor is, they will tell you and chances are it's FHA. Actually, they'll probably say Ginnie Mae, which is the same thing.

Most people search for the best rate when looking for a loan and don't think about the loan being sold. The truth is, the smaller the company the more chance your loan will be sold. Some companies only originate and then sell loans. The good news is lenders/originators should not only be able to tell you if your loan will be sold immediately, they should also be able to tell you which company will get it.

[lightningbolt]

03:47 PM on 09/29/2009

It seems the government is about to be flooded with obligations. The combination of having to pay for mortgage defaults AND bank failures will increase the national debt to insane levels. This will cause the dollar to devalue significantly.

[jsarets]

05:21 PM on 09/29/2009

Don't you think that the dollar would have been devaluing for quite some time now if our national debt actually caused dollar devaluation?

The deficit isn't a recent phenomenon, and no matter how many times the deficit hawks insist that the dollar will weaken, it hasn't happened. Usually, it only takes a few repetitions in the financial news media for any conventional wisdom to become a self-fulfilling prophecy.

Why does the dollar refuse to devalue no matter how badly we mismanage our public finances?

Because 1971 was the last time that any nation purchased foreign oil with anything other than U.S. dollars. We have an agreement (of sorts) with OPEC. Not even Iran or Venezuela will trade their oil in other currencies. Anyone who wants to buy oil has to buy dollars first.

As long as we can enforce this trade embargo, and as long as there's sufficient demand for oil, the dollar will consistently perform well against other currencies no matter what else happens.

Reagan was right: deficits don't matter, at least not for the American empire as we know it.

[lightningbolt]

11:48 AM on 09/30/2009

The dollar has been declining since 1913, when the Federal Reserve was created. Since then, it has lost more than 90% of its value. This is a FACT. LOOK IT UP! Look at the price of gold for another indication.
Deficits do matter, and Reagan was very wrong. There are three ways to pay for deficits: increasing taxes, borrowing, or printing money. Taxes have been going down since Reagan came, so we can't use that to pay for the deficit. Borrowing works, but only to a certain extent, there is a limit on how much other countries will lend. The rest of the deficit has to be paid by printing money, which the private Federal Reserve does. Printing money at a rate faster than the economic expansion of the country creates inflation, which devalues the dollar.

[dadw5boys]

03:08 PM on 09/29/2009

NO INTEREST PAYMENTS TO THE FEDERAL RESERVE INCREASED THE NATIONAL DEBT 2000-2008

DEVALUED THE DOLLAR

NOW 50 TO 1 DEVALUES THE DOLLAR.

[sonofsamphm1c]

03:06 PM on 09/29/2009

Private originators require a 10 to 20% down payment? How can this be? Nothing has changed. Haven't they heard? Nothing has changed since Obama took office, so I demand to know the name of the private source that will give me a no-money-down Jumbo for one million, no income verifications.

[dadw5boys]

03:11 PM on 09/29/2009

Banking is International no just local. Laws were changes by the G-20 Obama went Personally to make sure the changes were made you just have not heard of all the changes yet.

They have to be written up and then presented to Congress .

After that real changes can be made in the USA.

[robinhood1]

03:04 PM on 09/29/2009

A 3.5% down payment doesn't even cover all of the fees in real estate transactions. It's a wonder FHA lasted this long.