FHA Takes $4.6 BILLION Hit … It’s Just Taxpayer Money
Due to 'unforeseen' high default rates on home loans, the FHA expects to lose $4.6 billion. The causes of these losses are cited as the FHA’s seller-financed down payment mortgage program, which in particular has seen high delinquency and rates of foreclosure. In order to avoid the losses, the FHA will have to renew efforts to the end the seller-financed down payment program to which 35% of losses in 2007 can be attributed. *Editor's translation: Leave it to the government to come up with a home loan program where, if the buyer does not have the low 3% down payment normally required, the seller can pay that for them. So, from day one, the buyers have zero equity and zero incentive to continue monthly mortgage payments. Duh…wonder why the FHA is losing BILLIONS.
FHA Boost Loan Limits to $729,750 For California
Today the Government reported it is raising the FHA mortgage limits for loans guaranteed by the Federal Housing Administration in 14 high-cost California counties.
The Californis counties at the maximum level for FHA loans are Alameda, Contra Costa, Los Angeles, Marin, Monterey, Napa, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara, Santa Cruz and Ventura. Many feel the limits will be raised nationally very soon.
The higher loan limits will allow many to purchase homes with as little as 3% downpayment. This is anouther move to assist the falling housing market.