luring people with no-down mortgages into homes that are certain to lose significant value is either delusional or down-right evil. Either way, the results will be the same — a bunch of pissed off people and further thrashing of public finances.
They came up with the FHA from the,” The National Housing Act of 1934″ with the public intent to make housing more affordable and the cynical understanding that “debt encumbered dont go on strike”. Which is understandable given the economic climate at the time. This is also way we have homeownership rates at close to 70% in the US and in the 20%s in some european countries.
Ironically, today, it’s used to keep RE prices elevated mainly because of the extreme systemic dependancy on certain prices levels with the public spin of helping people. Which, in an abstract sense, is true, but not for the reasons advertised.
Every gimmick they use to keep the illusion up, is basically a hail mary pass at trying to avoid the inevitable. Eventually, the game will be over and the biggest bubble in the history of the world will deflate.
