Buried at the bottom of a New York Times article on the trouble FHA housing loans are in is this tidbit, Congressman Barney Frank of Massachusetts wants to raise the lending limits of an FHA loan $100,000.
A few weeks ago, Congress extended the higher lending limits for another year. Representative Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that he planned to introduce legislation next year raising the maximum F.H.A. loan by $100,000, to $839,750. via the NY Times
Now I do not know about you, but this is another level of madness that fits right in the pattern of how are Federal Government has been running lately. They have a program that is losing money hand over fist, the FHA is close to needing a handout in the first time in it’s history, and they are thinking of increasing the risk to the program substantially.
Barney Frank has done this before by forcing Fannie Mae and Freddie Mac to be an instrument of social change instead of fulfilling it’s mandate to be just a financial institution. Now it is a shell of it’s former self and being run by the government. The FHA is a fully run government entity that now is being used to prop up a fragile housing market in many cities by making loans that banks will not.
Let us hope that it also does not turn into a money pit that is propping up values and distorting the market. Oh wait, I think we are too late for that.
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Are FHA Loan Limits Increasing $100,000?
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