Why FHA Down Payment Requirements Should Not Be Increased to 5%

Politicians just love to introduce new regulations, don’t they? Every time something goes wrong, these lawmakers love to throw their weight around trying to show their constituents that they have their best interests in mind. They think they know what they are doing but history shows us otherwise. So this republican representative, Rep. Scott Garretts from New Jersey thinks the FHA needs to make it more difficult for prospective borrowers to be approved for FHA loans. His reasoning is that currently, the FHA has a very high default rate and by making their lending guidelines more stringent, it would better protect the American taxpayer from having to bail it out in the future. Here’s the problem. With every new regulation, with every new tightening up...

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