Just How Little Should We Expect From Lenders?
November 12th, 2007
Related FHA Stories
- House Passes FHA Modernization, Bush Threatens Veto
- FHA Pool Dips As Money Goes To Treasury
- Is FHA “Reform” In The Works?
- Are Bigger FHA Downpayments Coming?
- FHA Loans Provide Home Financing for “Unconventional” Borrowers
Story Tools
Richard Armey, Republican majority leader of the U.S. House of Representatives from 1995 to 2001, and now chairman of FreedomWorks Foundation, says that current proposals to reform the FHA mortgage program won’t work.
Writing in The Washington Times, Armey says that “use of FHA insured loans so more people can experience the ‘American Dream’ of homeownership may sound good, but the devil is in the details. A small but pernicious piece of the bill would replace the requirement for a financial audit of mortgage brokers with a requirement to post a $75,000 surety bond. During committee hearings, there was much testimony about the expense of the financial audit for the poor broker and how doing away with this oversight would make homeownership more affordable.
“But the audit requirements are there to protect taxpayers, who may be at risk if defaults on FHA loans significantly rise. The audit is a tool to ensure that lenders are responsible and do not unduly stress the system’s finances. To date, these audits have served taxpayers well, with the FHA program bringing in enough revenues to cover potential losses. A laxer system could pose problems for taxpayers.”
Gimme a break. FHA lenders potentially handle financing worth tens of millions of dollars a year – if not more. If the driver of an armored car is required to be bonded then why not FHA lenders? Why is an audit do terrible? Isn’t it prudent for a business to have an annual audit anyway?
For the full article, see: Shelter from the FHA
- |
- |
-
- |
This entry was posted on Monday, November 12th, 2007 at 2:03 pm and is filed under , . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Listen to FHA Loan Pros columnist Peter Miller on American Public Radio:
RSS Feed
March 27th, 2008 at 8:41 am
The problem is that running a small business is extremely costly. This requirement does not affect the large companies (many of which are under investigation today for fraud) but it does hurt the mom and pop shops across this country that have operated their businesses in a professional manner with our customer’s best interest in the forefront. If you want to protect the American public from fraud, go out there and bring the wrath of the Federal government down on the violators, not the people who are actively running good businesses. Soon the small business will be unable to turn any profit and will be forced to succomb to the giants in all industries.