Despite concerns in some quarters that we might be inflating another housing bubble, the government is apparently more worried about a slowdown in the housing market. In addition to John Berlau's piece, the Wall Street Journal has further news from everyone’s favorite spectacularly failed government lenders today, and it suggests we’ve learned absolutely nothing since the economic crash:
A new home lending "revamp" has been announced by the Obama administration, but it already looks like it's going to be a disaster. How would it work? Just ask an upper middle class family about all the cool things they could do with the money they'd save on a refinanced mortgage!
The revamp is aimed at homeowners like Christine and Hector Penunuri of Gilbert, Ariz., who have never missed a mortgage payment and who both have jobs and good credit. Yet their application to refinance their five-bedroom home, which has fallen in value, was denied earlier this year because their tax returns showed a $1,000 loss in start-up costs from Mr. Penunuri's business, which isn't even his day job.
It's "absurd," says their mortgage broker, Steve Walsh of Scottsdale, because the loan is already guaranteed by government-backed mortgage company Freddie Mac.