Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

If You Picked Up a Cheap Mortgage Today, Thank a Taxpayer

Housing-Market / US Housing Jan 27, 2015 - 11:32 AM GMT

By: Money_Morning

Housing-Market

Shah Gilani writes: If you’re looking for a cheap mortgage to buy a new home, today should be a good day.

That’s because today the 50-basis point premium cut from the Federal Housing Administration (FHA) went into effect.

So with practically nothing down, unless you consider 3.5% down something, you can get a cheap loan through the FHA, one of those government agencies that was supposed to be getting out of that business.


But here’s a tip. Don’t be in a rush today – or tomorrow, for that matter.

Here’s why…

Taxpayer-Sponsored Mortgages

That’s because Fannie Mae and Freddie Mac, the two giant government-sponsored enterprises (GSEs) responsible for magnifying the credit crisis and mortgage meltdown, are going to try and do the FHA one better.

Without getting into the mechanics of how to get a cheap mortgage with the government’s helping hand, my tip is to wait and see what Fannie and Freddie are going to do for you.

You can’t go directly to either of them, but your friendly local mortgage broker or crack bank mortgage dealer will set your “desktop” Fannie or Freddie virtually auto-approved (if it makes it past the desktop) application in motion.

Basically, take a look at them all. Got it? You can play the government’s mortgage genies off each other to get the lowest mortgage possible.

Don’t bother wasting your time going to “private” lenders that don’t rinse your application through a government hose, because they can’t compete with organized crime at the government level.

I’m going to keep this short, really short, because No. 1) it’s late (I’m late on account of having to go to a bunch of stores and stand in long lines to stock up for the big storm heading my way). And No. 2) the same old No. 2 we all know about is still going on.

So this won’t take long to explain.

After the financial crisis of 2007-’08, Fannie and Freddie were insolvent and the government bailed them out.

The FHA played a slightly different game, so while it was in trouble, it could still be propped up to keep mortgage money flowing.

Nothing’s changed.

The whole No. 2 talk about getting the government (taxpayers) out of the mortgage business to “normalize” the industry once and for all – that never happened. It never was going to happen.

Big banks, the ones with all the money, weren’t going to lend out mortgage money, because they were making too much risk-free money playing the quantitative-easing (QE) game with the U.S. Federal Reserve.

So the government said, “We have to do what we can. We have to lend if the banks aren’t lending.”

And so, F&F are F-ing big as ever, and the FHA is the biggest it’s ever been. And there is no real “private” mortgage money to speak of.

That’s it.

I have to go now and help some friends finish putting a tarp on their roof. They probably won’t be staying over here when the thing blows off (the winds are already blowing gusts up to 34 mph, heading to 50+ mph).

But I just wanted to let you know that if you don’t hear from me, because my house got blown away or the roof caves in from three feet of snow, don’t worry.

It’s a great time to buy a house at inflated prices (who says there’s no inflation?) and pay for it with a government-wrung loan.

Wrung from you taxpayers, so thank you.

Source :http://www.wallstreetinsightsandindictments.com/2015/01/picked-cheap-mortgage-today-thank-taxpayer/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in