Representative Jeb Hensarling of Texas presided at the
hearing on the Federal Housing Administration’s (FHA) proper role on the
country’s mortgage insurance industry. Being the chairman of the House
Financial Services Committee, Hensarling opened the hearing stating that the
current economic status of America for the last quarter of 2012 was
unexpectedly close to yet another swerve into tragedy. The expected economic
growth in the last quarter did not happen, and the statistics only reflected a
growth of 2%. Hensarling purported that America could have done more than 4% for
the last year, at least.
According to the chairman, 2% economic growth is indicative
of Americans being unable to sleep, worrying over an insecure future. The
healthy economy that hardworking Americans deserve will never come to reality
unless a solid housing financial system is established with sustainability and
competitiveness. With this, Hensarling closed the clause stating that the FHA
has done a horrendous job and has only accomplished in being a complete
impediment to this envisioned system.
This has led to the FHA being brought into questioning
before the Financial Services Committee. The FHA is currently the biggest
mortgage insurance agency in the country. Initially, the FHA was built to
provide equal opportunities to hardworking Americans who are first time home
buyers, as well as those whose credit scores are far from impressive, but are
still remain financially reliable—this is specifically for the middle or
moderate-income American citizens. Today, the FHA has obviously strayed away
from this initial mission.
One of the biggest anomalies in question is how the FHA is
providing mortgage insurance to moderate-income homeowners with homes that have
values over $729,000. With an already risky term offered to middle-income or
even low-income Americans, the agency should have complemented the arrangements
by keeping a robust mortgage market. However, today they offer extremely low
down payments especially when compared to private lenders; leading to their
favor. More premium holders means more risky insurance arrangements.
What will most likely to happen is the FHA will have to be saved by yet another taxpayer
bailout, when the whole country knows it cannot afford another one of those.
This kind of mismanagement puts further stress on every hardworking American.
Instead of allotting more services for the improvement of American lives, such
as education and healthcare, the government is busy bailing out troubled
federal agencies.
Hensarling expressed his dismay in stating that the FHA is
no longer helping Americans achieved their American dream of owning a home
since they are provided with loans that are financially beyond their means.
Instead of the American dream, the housing mortgage insurance market has become
a nightmare.
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