The current Congress is still pushing home ownership for everyone regardless of affordability. In their latest brainstorm they have restructured the FHA fees. These are the FHA loans that require at least 3.5% down. To make it even easier, Congress has cut the upfront fees by over 50% - from 2.25% of the loan to 1%. That means an up front savings of $2500 on a $200,000 loan which can be spread over the 30year life of the loan. These same economic wizards have also raised the annual fee for the loan from .55% to .9%. So the monthly fee goes up about $60 on the same loan. The net result is that after ten years, Mr. Homeowner will pay about 3 times as much as he does now. They think this is a good deal!
Another economic triumph from the geniuses who have brought you 105% mortgage loans and eliminated income requirements; the cash for clunkers program that is responsible for increasing the cost of a used car by 10; the many Stimulus programs that have managed to move the unemployment rate from 8% to 9.6% at a cost of only $850 billion dollars; and on and on.
The First Dope says he needs more time. It will apparently take him the same amount of time as it took Castro to figure out that it won’t work. But I don’t have 51 years to wait.