[quote=carlsbadworker]Interesting, with $8000 credit and FHA loan, it was pretty much a no-money-down program by the US government in the last few years. It surprises someone that it is more risky??[/quote]
Exactly. This is what many of us were saying years ago — the risk is now borne by the govt instead of private entities. These 3% down loans — especially with the tax credit that could be applied to the down payment — were never going to work out in the long run. Not only that, but the fact that sellers are still allowed to “credit” buyers for closing costs really means that buyers have precious little skin in the game, if any at all.
All the refinance activity, with private loans being refinanced into govt-backed loans, was a way to off-load the risk from the private sector to the public sector, too. Taxpayers are now on the hook for far more than they ever would have had to bear if things were allowed to correct when the market was trying to get back to normal in 2008.
All of the bailouts and govt interventions were done for the benefit of foolish lenders and private financial institutions (yes, including pension funds). It was never about saving Joe Sixpack, the idiot home-debtor who bid up prices with NINJA loans.
But I’m guessing some idiots will still believe that our problems are due to “union thugs.”
