5.26.2010
“This is a market purely on life support, sustained by the federal government…Having FHA do this much volume is a sign of a very sick system.”
David Stevens, FHA Commissioner
Apparently, even those in the government know that the government can’t be financing more than 90% of loans if it were a healthy market. Without the government, at these rates, there would likely be NO LENDING done. Why? Would you lend money for 30 years at 5% if you may have to pay 7% on a CD 4 years from now? Likely not. However, this is exactly the situation that our government and Federal Reserve has put us in – a screwed up market which will require much pain to get back to normal. Read more here on Commissioner Stevens’ comments:
