First-time buyers and former homeowners in South Florida may be eligible for 100 percent down payment assistance through a new program arranged by a nonprofit housing counseling agency based in Hollywood. . . .
The program, backed by the Federal Housing Administration, is designed to help people who have never owned a home, as well as consumers who filed for bankruptcy or lost homes to foreclosure and short sales during the housing and financial crises from 2006 through 2011. [Emph. added.]
Let me see if I have this straight. The government has come up with program that will offer 0%-down mortgage loans to people who already have a history of bankruptcy or foreclosure. Perfect! What could go wrong?
Donald Trump may be on to something: the people who are running this country are idiots. We’ve all seen first-hand the huge social and economic costs that result from a policy of urging homeownership on people who can’t afford to buy homes. In 2008, it brought on a disaster that nearly flattened the financial system. And here policymakers seem to have learned nothing.
Rather than the government handing out taxpayer-backed no-down-payment money to people who won’t be able to pay it back, I have a better idea. Abolish the FHA. Get rid of the GSEs. Wind down the mortgage-interest deduction. Which is to say, find every inducement the government has concocted to encourage people to buy homes, and blow them all up.
Instead, the government is back to pushing mortgage money to subprime borrowers. Madness.
What do you think? Let me know!