Larry Kudlow asked me to come on the Kudlow Report last night to discuss the looming ruin of the FHA.
- The FHA has expanded from guaranteeing just 2% of mortgages to over 20% in just a couple of years, dramatically raising its exposure to the still declining US housing market.
- The FHA still backs toxic, almost-no-money down mortgages. It will currently guarantee mortgages with as low as 3.5% downpayments.
- The FHA’s mission is political: it is still trying to “expand home ownership.”
- The discredited ideology of home ownership is the most toxic ideology since communism.
- The number of mortgage companies whose loans are backed from the FHA has grown from around 1,000 to over 3,300 but the FHA hasn’t grown its ability to analyse these companies.
- A recent audit of FHA applications found only 5% included all the necessary documents.
- The leadership of the FHA is completely oblivious to its coming ruin.
- The FHA is in even worse shape than Fannie Mae and Freddie Mac.
Here’s the video: