More Fallout from New Foreclosure Bill
The American Housing Rescue and Foreclosure Prevention Act is already showing its flaws, and it hasn’t even been enacted yet. In a move that shows just how inept, incompetent and inefficient our federal government is, THA raised the premium that it charges all borrowers, effective October 1st.
The housing bill signed into law just a month ago prevents FHA from charging higher rates to borrowers who are higher risk candidates. The effect is similar to charging 16 year-olds (proven high-risk drivers) the same for car insurance as a 43 year-old with no points on their record.
While the amount of the premium isn’t terribly large- approximately $250 per hundred thousand borrowed- it still represents a taking from borrowers who should expect better rates, based on their good credit scores.
Apparently, the idea of “fairness,” so frequently mentioned by the authors of the legislation, was conveneiently omitted from this portion of the legislation.
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