FHA changes make housing bill a 'mixed bag'

Congress puts one-year moratorium on risk-based pricing

By Matt Carter, Wednesday, July 30, 2008

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To Lenn (ps. She is a person who post a brilliant reply),

I second your saying: "What I can't figure out is who and why is objecting to the seller paying the buyer's down payment. It defies logic, market and common sense."
Did we forgot those days our ancestors did the business when there was no title insurance,or home warranty? Nowaday, people called it "well-managed" society. Ha! under "well-managed" Wall Street machine, we are still not immune from those downhill of cyclical business.
To me, the so-called "rescue bill" has nothing new in it if we look backward how the private citizens did their jobs. The traditional private "equity-sharing," under the bill's new rule, transforms into Hud's more ugly and greedy equity-sharing.
Have you heard any seller or partner who wrote an equity sharing plan into his loan or contract could get what Hud would share the profits from 50% up to 100%? Hardly in my knowledge of the past, it is never heard for more than 50% profit without a huge contribution or interest reduction from the seller or investor.
Well, too much government involvement in the business seems the future trend.
Following the book or guidline, maybe better described it as "due process," a banker or a bureaucrat is well-protected. But who cares of the productivity, creativity, flexibility or "logic"? That's why we have all banker who accept an all-cash offer, but they won't let you "assign" the purchase contract or make any change of buyer's title holding at close of escrow.

* I don't even want to discuss about $300 billion government quaranteed "New Loan Replacement" program.  Until this moment, it seems to me only just a few, if not "nobody", dared to explore the true meanings and analyse the possible effects of it.

**If we go to the bottom line, allow me ask you to first compare the traditional private "bank short sale" to this fancy government  guaranteed "short sale" from all the difference perspectives of "consent of short sale", "loan relief tax consequence", "mortgage insurance premium", or "realistice market true value."  I have so many questions as to the creativity of capitalism, such as if the homeowner is able to get a new loan with 80% market value (even the owner is willing to put additional fund, equal to another 10% down, to make it happen) to avoid the 1.5 percent HUD's surcharge.  If not, why there is no choice for the home owner, except follow the "rigid" game rule made by the bill and pay a high charge traditioanlly called "PMI"?

Hope you agree that there is nothing new created by the so-called "rescue" bill.   Every idea the bill presented has been existed in all those 30 years old classic books, such as "RE Exchange & Acquisition Techiniques."   The bill is just a mirage full of smoke and mirror with highly expection toward government powers.