It’s All FHA’s Fault!
Posted by Matthew Brian Hersh on April 27, 2012
While we're used to seeing articles that blame the homeowner for some part of the housing crisis, some of the articles that come over the transom give us pause for their angle. This gem from Reuters, under the banner of an "Insight," did just that:
"More than 1 million Americans who have taken out mortgages in the past two years now owe more on their loans than their homes are worth, and Federal Housing Administration loans that require only a tiny down payment are partly to blame."
OK, so it's the homeowners' fault. We've heard that before, but then there's financial analyst Gary Shilling's assessment: "This is creating a new wave of underwater borrowers... We have all three branches of government trying to keep people in four bedroom houses who can't afford chicken coops."
Four-bedroom houses! It's as if Shilling thinks such things amount to luxury rather than necessity.
Here's how we'd rewrite the article's deck:
More than 1 million Americans who have taken out mortgages in the past two years now owe more on their loans than their homes are worth, and two-thirds of them are non-Federal Housing Administration loans. Looks like non-regulated mortgage brokers are at it again.
And that's the truth.
About the author more »
Matthew Brian Hersh proudly served as senior editor at Shelterforce from March 2008 to October 2012. He studied English at Rutgers University and has spent his professional career in journalism, policy, and politics. He displays many of the trappings of a New Jersey sports fan: dispirited Mets fan, former Nets fan before they left the state, and normally satisfied Giants fan. Hersh lives in Highland Park, NJ with his wife and two children.