FHA To Hike Fees! Will This Stimulate Home Sales? No Way!
As reported today by CNNMoney, beginning April 1,2012 the FHA will be increasing the insuring fee it charges to customers. In fact the initial premium will rise by 75% and the monthly premium will rise by 9%. Recall what happened to Netflix when they instituted a lesser increase. If not I will restate the obvious for you which keeps getting lost in the fog by our leaders. They lost approximately 1 million customers. Our leaders think we are an endless well of cash. We are unwise to allow this thought pattern to continue but I fear the leaders have won via their persistent bribery with the sweat of others.
Now I have been in the home finance game for almost 30 years now and know from where I speak. With no ideological blinders on I can plainly state that virtually all the problems we suffer from in this industry was straight from Washington in the form of bad policy by Congress and even worse policy from the Federal Reserve. The bulk of the lunacy began circa 1996 when a few Clinton appointees decided to turn HUD as well as Fannie and Freddie in to social programs. Add a dose of Greenspan and the rest is history. I am sure it made them feel good at the time as they cashed in their multimillion dollar bonus's while thinking they were healing a social injustice. They even cooked the books to enlarge these bonus's. But they were let off the hook and now live large.
I know those predisposed to hate Wall St. and rich Bankers will likely not choose to believe this historical take but I can do no other than be intellectually honest. I saw it happen first hand and believe me did not like what I was watching. I once took pride in my field and by 2003 felt very dirty by association not action. And yes I know what Wall St. was doing but really they were diversifying stupid risk which was mandated on the banking world from Washington under fear of reprisal. Of course they stood to collect fees for their service but that has no bearing on how we got here.
Enough history on how we got to the last four years of utter despair and pain for many good and decent people. Houses lost. Jobs lost. Careers ruined. And we have yet to see anyone from either party implement a true market approach to healing this mess. As stated here before these leaders are totally incompetent. My industry colleagues and I have many solutions but no one will listen to us. At the end of the day we need a stimulation in home buying to ease the glut of inventory.Continued on the next page