Uncle Sam the Refi Man: No Money Down,No Problem

CNN reports on Uncle Sam the promoter of reckless mortgages:

Today the FHA won't insure loans above $362,790 for single-family homes, and even less in lower-cost areas. Under the bill before the House, which is expected to vote next week, that ceiling would increase to 100 percent of the conforming loan limit for mortgages backed by Fannie Mae and Freddie Mac, currently $417,000.

But Barney Frank, chairman of the House Financial Services Committee, plans to propose an amendment that would boost that new limit to $500,000, and give the FHA commissioner discretion to raise that limit further during mortgage crises.

Reduce down payment requirements. Homeowners would no longer be required to have 3 percent equity or the cash equivalent. They could get an FHA-insured loan with 0 percent down.

The mortgage problem was created by too little equity down on houses.Now,Uncle Sam the con man wants to keep the crisis going with scams like no money down.In a free market in housing,it's not likely,that mortgages would be written without down payments.We think separation of church and state is a good idea.We also think separation of the government from housing is a great idea.The solution is deflation of housing prices.