My point exactly. That a big chunk of the “market” has nothing to do with market and everything to do with populist politics! Can’t anybody in govt (Larry Summers, Tim G., Paul Volcker, etc.) tell Obama that delaying the inevitable will only prolong the pain?
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FHA underwriting was this loose way before the current administration got in office. It has been tightening up underwriting and lenders have been adding on overlays.
FHA is popular for one reason and one reason only. 3.5% down. If FHA wasn’t there it would be whoever was the next lowest down payment requirement would be the most popular.
