The FHA head said the proposal is a “complete game changer.” Yeah right.
Complete Game Changer – Not
People are already in trouble because they do not understand property taxes or maintenance.
50-Year mortgages won’t help with the down payment. For many, that is a huge obstacle.
Home prices are starting to decline. Anyone who needs to sell their home within a few years would be upside down. We don’t nee more people trapped in their homes.
Prices need to fall and fall dramatically. To the extent the product would create demand, it would help keep prices higher.
The average age of the first-time home buyer is over 30. Congrats. They would own their home at age 80+, assuming they were still alive. If not, heirs would own the mortgage.
30-year mortgage rate are higher than 15-year rates. 50-year rates would be higher still. The higher rate would eat up some of the alleged “savings”.
Bill Pulte fired ethics workers who were looking into his ally
The Washington Post reports Housing official Bill Pulte fired ethics workers who were looking into his ally
President Donald Trump’s firebrand housing finance director, Bill Pulte, fired internal watchdogs at the Federal National Mortgage Association who were looking into multiple complaints against a high-ranking company officer close to him, according to people familiar with the matter.
Pulte said last month he had fired dozens of Fannie Mae employees in what he said included a bid to end diversity, equity and inclusion initiatives at the mortgage giant. Yet six people familiar with the matter, speaking on the condition of anonymity because they feared retribution, said those firings effectively cleared out the company’s internal watchdogs, charged with ensuring Fannie and its officials follow the law. The ethics team — including its chief, Suzanne Libby — was fired shortly after Fannie management directed investigators to cease looking into the Pulte ally, said a couple of the people familiar with the situation.
Pulte’s roles are wide-ranging: He runs the Federal Housing Finance Agency, which oversees the U.S. mortgage market and controls Fannie and its peer, the Federal Home Loan Mortgage Corp., or Freddie Mac. Pulte has overhauled the company boards and made himself chairman of both firms.
On Monday morning, at least 200 additional Fannie employees were fired, according to two sources familiar with the terminations, speaking on the condition of anonymity because they were not authorized to discuss the move publicly. It was not immediately clear which staffers were fired or how they were selected.
Earlier this month, Reuters also reported that the internal FHFA watchdog was being removed.
Mish Proposal
The first thing I would do is fire Pulte. More importantly, I would end the the FHA, HUD, Fannie Mae, and Freddie Mac.
Every one of those agencies increased demand for houses and thus prices.
Government has no business in the home ownership business.
Small Government?
Once again Trump campaigned on a pledge of small government. And once again the cult looks away as Trump’s meddling increases everywhere you look.
In case you missed it, please consider TDS and TWS: Will You Admit This Is Also Deranged?
Addendum
After 12 years of payments on a 50-year mortgage very little principle will have been paid back.
Here’s the exact comparison for a $400,000 loan at 6% fixed rate after exactly 12 years (144 monthly payments) on 15-year, 30-year, and 50-year mortgages.
| Term | Monthly P&I Payment | Total Paid After 12 Years | Principal Paid After 12 Years | % of Original Principal Paid | Remaining Balance |
|---|---|---|---|---|---|
| 15-year | $3,375.74 | $486,106 | $305,364 | 76.34% | $94,636 |
| 30-year | $2,398.20 | $345,341 | $134,978 | 33.74% | $265,022 |
| 50-year | $2,063.74 | $297,178 | $66,251 | 16.56% | $333,749 |
This post originated on MishTalk.Com
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Mish
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