FHA Mission Statement

"We're losing money on every deal, but we're making it up in volume."

"This insured mortgage product has allowed many buyers to go in with 30x leverage when purchasing a new home.  So it should come as no surprise that the FHA is now inching closer to a bailout.

First, mortgage insurance premiums are soaring to make up for the capital reserve account that now finds itself $16 billion in the red.

What is occurring in the FHA is symbolic of what is now part of our economy.  Essentially we have turned into a massive moral hazard economy.  Major subsidies to hide losses and pushing problems down the road.

Now with the FHA running low on cash this is a cash cow for them but the burden is now placed on current buyers to make up for the mess created in the last few years (does this sound familiar?).  Welcome to the current economy.  And how many people actually have the $100,000 for a down payment?  As we highlighted in our heavily commented California middle class article, not many because many are going with this much more expensive FHA insured loans product.  Like an expensive credit card, people are stretching their wallets to purchase that home because incomes are certainly not rising."

http://www.doctorhousingbubble.com/fha-bailout-fha-mortgage-insurance-premiums-permanent-fha-loans/