carlover you have posted a very correct response. I am incorrectly lumping federal measures of increasing insurance to a bailout and that is incorrect. However it (increasing the FHA limit) is a knee jerk response (by the government) to the current situation and that is what I object to. I also note that your previous posts are well thought out and are sound, (that 30-40 basis point typo not withstanding…:))
I will say this, like you I am actually looking to purchase a home. I don’t want to purchase now or in the near future but I will have to for family reasons. In essence a program like this will help me immensely as well and personally it will in fact lead to me getting a much better rate and a much larger amount of money if the timeline falls in place.
Anyways, again, I don’t like it because it is a response to the current MUCH NEEDED price correction, not because it was done in fairness to anything. You are correct that the goal is to restore confidence in the secondary market but that secondary market needed a slap in the face and it needs to sting for awhile and overall it would be better for it to restore it’s own confidence by a stronger underwriting procedure put in place by originators. That would eventually happen…
Still, I don’t agree with it but thank you for the correction.
Bugs I agree rates will go higher but if there is a recession I don’t see that happening for awhile. I think we will be stuck in a 10 yr treasury range of 4.25 (dare I say 4.0?) to 5.25 for at least another year or 2 depending on how bad things get.
