Wednesday, July 9, 2008

HUD Secretary Speaks out on H.R. 3221

Further evidence that H.R. 3221 is a bank bailout does little to help homeowners, HUD secretary Steve Preston argues that taxpayers will be absorbing "preventable and foreseeable losses."

Preston argues that FHA needs to be able to implement risk based pricing.  This is interesting considering the mortgages this bill was written for actually fall outside the guidelines that would normally have had FHA backing.  What this risk based pricing would ultimately show however is that almost none of these loans are worth taking on for any investor.

The fact is here the banking industry made a risky bet, and they came back to congress, specifically Christopher Dodd, to bail them out, the potential cost to taxpayers?  $300,000,000,000.

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