Note that both of these programs date back to the 1930s
Reader comment on: This Will End Badly
Submitted by Lyle (United States), Jun 4, 2013 22:32
The FHA is a loan guarantee program, the question would be is the premium high enough? The USDA program is a guarantee limited to 115% of the regional median income, and the direct loans are limited to 50% of the median income (although its hard to see how many would qualify at that level assuming reasonable underwriting were done). The homes here need to be in rural areas, which makes one wonder why Nantucket is rural?
IF they are not balloon payments or teaser arms but fully amortizing mortgages then a good bit of the issue is removed, in that at least at the time of the loan you can afford the fully amortizing payment. It was the teaser arms and the like that the loan sharks gave folks that caused the issue, purely greed on the part of the mortgage salestypes get the max commission and the devil take the hindmost.
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