FHA Home Mortgage Loan Interest Rates

Here are my thoughts. What are yours?

1) Small scale lending must be nationalized. The “free market” has small interest in lending to individuals and small businesses. The “free market” will always avoid the risk of small loans. It isn’t something that will get better with affluence or wealth. Thus, all of the historic government programs designed to facilitate lending to small borrowers must be nationalized or firmly regulated like a monopoly. The historic separation of risk and reward, the co-signing or guaranteeing of loans that has been done by Freddy mac, fanny May, FHA and others, needs to be scrapped for a government department dedicated to small capitalization lending, or heavily regulate it. Most mortgages and small business loans will fall into this category, say anything under a million dollars. Here is an simple way to reckon of it: We all know that utilities have monopoly power and must be regulated. Reckon of residential lending in the same way. The free market will not willingly fulfill this function. The current system of private funding and government guarantee is a separation of function that simply does not work. Do you find this thought somewhat socialist? Then is the regulation of your utility company also socialist?

2) the aspects of derivative trading legalized by the “Financial reform act of 2001″ needs to be repealed, permanently, or revised to have the same underwriting and capitalization requirements as the insurance industry. If an insurance business insures beyond their means, then they are consequently held criminally liable. Derivative trades must be held to the same standard. Is this too harsh? Too conservative? Then why do we hold the insurance industry to this standard, and not the investment houses?

3) Outsourcing needs to be taxed to attempt to slow or stop the capital that the the United States bleeds to India, Mexico and China. The amount those countries have grown from our outsourcing, the economic power they’ve used to bid up the global price of oil, is an accurate measure of the economic power the United States has lost, to outsourcing. Those revenues should be used to help fund higher education (state university systems). Let’s build an affluent populous. Are you thinking Smoot Halley? India really likes it that you reckon that way.

4) the federal government must make provisions to develop energy sources other than foreign oil, primarily wind and nuclear energy. The raping of our coast lines and oceans for oil should be legislated permanently illegal. Notice how the call for drilling has stopped? The destruction of our oceans and coast lines shouldn’t be subject to the daily price of oil.

5) disclosure of the terms of adjustable rate mortgages must be required to be in a large font size, in plain English, like effective interest rates are required to be showed currently on all conventional mortgages. The length and nature of the “teaser” period of ARMs must be legislated to be clear and comprehensive to someone with a sixth grade education.