HUD Study on FHA Loans Offers Lessons on Avoiding Risk

In 2018, an interesting study was published by the nonprofit R Street Institute, which found that the Federal Housing Finance Agency (FHFA) was allowing government sponsored enterprises (GSEs) to issue federal loans without requiring earthquake insurance for borrowers, potentially putting the taxpayer at substantial risk should a catastrophe occur. Now several years later, a report […]

Loophole Leaves Taxpayers on the Hook for Earthquake Damage

The vast majority of homes in earthquake-prone areas lack any insurance protection against earthquakes, exposing American taxpayers to hundreds of billions of dollars of risk if disaster strikes. And while some lawmakers, including Rep. Sean Duffy and Sen. Tim Scott, are urging policymakers to address the problem, Congress has yet to enact reforms. The crux […]

The Public Should Not Be a Mortgage Insurance Backstop

Mortgage Insurance is a guarantee that a mortgage lender will be repaid.  Without this guarantee, most lenders would be reluctant to loan money for 15 or 30 years to anyone lacking high income, high down payment and high credit rating.  Their reluctance would show up as refusal to loan or as an uncomfortably high interest […]

Save Us from Congress’ “Savings” Scam

The Federal Credit Reform Act of 1990 (FCRA) may sound righteous, but it contains a scam costing consumers a pile of money.  The FCRA forces the Congressional Budget Office (CBO) to assume that loans made directly by the government earn huge profits (called “savings”) without provision that such estimates could be wrong.  Congress likes this […]