Congress has another band-aid they want to put on the economic crises this country and the world are currently experiencing...at a cost that would be picked up by a segment of the population that can least afford it - first time homebuyers.

The goal of a new bill, H.R. 3706, introduced by Rep Scott Garrett (R-NJ) on October 1, 2009 would raise the minimum down payment for FHA backed loans from the current 3.5% of purchase price by over 42.8% and require buyers to raise 5% just for the down.  The bill, is known as the "FHA Taxpayer Protection Act of 2009"

Federal Reserve Chairman Ben Bernanke, appearing before the House Financial Services Committee, stated, "Given the low down payments, there is greater risk of loss there, which will be borne by the taxpayer." (I really wish someone could tell me who the FED is and why does he have so much power.  I never voted for him - did you?)

Now I do not want to split hairs here as I do not have statistical data in front of me at the moment, but I am confident that everyone reading this will agree with me that the majority of FHA Loans currently being written are by first time homebuyers.  I know that in my own busy team office, we have not written an offer with FHA financing that wasn't for a first time home buyer...all year long.  To be honest, none come to mind for any move-up buyers, at all.  Typically the move-up buyer has more cash to put into their new home - usually from the sale of their prior home.  Well, we all know the story there - so again, no need to belabor that issue.

The WOLF in WOLFS Clothing

This big bad bill is being portrayed as hurting the first time buyers by increasing their down payment level to the aforementioned 5%.  Well this bill is even uglier than that with its restrictions of closing costs and prevent the buyer from using FHA money for these closing costs - which can run up to 6% of the purchase price.

So, What is the Real Problem?

My problem is I agree with much of what the bill represents.  I for one do not believe that owning a home is a right...and certainly not a right that should be carried by the taxpayers.  I believe that Rep Garrett is 100% correct when he said "homeownership is a noble goal".  Of course there was a ‘however' - which I still agree with.  He went on to say, "However, the benefits of promoting homeownership using government subsidies must be balanced against the potential risk of insuring less creditworthy borrowers and exposing the American taxpayer to that risk. As we have learned repeatedly throughout the mortgage crisis, the amount of equity a homeowner has in their home directly correlates to the credit risk associated to their mortgage. In trying to find a reasonable balance between the current, extraordinarily low level and a level that would ensure a significant reduction of risk to the taxpayer, I am introducing legislation to increase the FHA down payment requirement to 5%."

The problem I have is whey does the government have to take this battle down to the lowest common denominator?  Why not pursue the injustices of Wall Street and Detroit?  Why not look at our foreign policies and determine if we can't do the world more good taking care of our own for a few years so we are once again healthy enough to take on the issues of the world.

Again, I don't have numbers here and at the risk of leaving out some very important injustices, I just want to ask why they think that me and my neighbors can fix all of these problems.  Just give us the same health plan they have and let me do my job...is that too much to ask?