Doug my read is something like what is currently being proposed today only on a larger scale…
That is the FHA will bail out distressed homeowners by purchasing the existing mortgage from a lender. The purchase will be made (HOPEFULLY) at a presently appraised value. The lender writes down the difference. The homeowner gets a new loan at a low rate pretty much directly from the FHA.
So no there is no new beauracracy, just the existing one that becomes responsible for oh… maybe 1-2 trillion worth of mortgages. So basically that is the plan. In short it is a very close step to nationalizing housing.
Who determines if the person is capable of repaying the loan? Why the FHA? Who backs the FHA
