garysears, you won’t get an argument out of me in favor of FHA. But it is what it is. The government blew up this last bubble and they’re trying to blow it up again, albeit with less ferocity. Greenspan himself was encouraging people to get ARM loans 6-7 years ago.

FHA was supposed to “help” people buy housing. I.E. allow people to buy houses earlier than they should or more than they should. W/out FHA, poor people would cry foul, saying the rich keeps on getting richer while the poor get no help buying a home.