I agree patientrenter. FHA standards are too loose with regard to down payment. In the recent shadow inventory article I commented that the flipping market wouldn’t exist without the FHA. FHA buyers ARE the market at the low end. FHA standards are why low end prices have exploded this past year. I think many of the houses bought last year with FHA backing will be foreclosed, as I am expecting low end prices to trend downward again.
I’ve been wrong before. The key for prices is in how the delinquent loans are handled. Either money is handed out to big money vultures under the table via discounted off market bulk sales, or prices are allowed to come down for normal buyers by putting the inventory on the open market.
I just can’t reconcile price strength with loan distress. It seems like nothing is better than 2 years ago, and maybe things are worse. Getting tired of waiting for it to play out though…
