HUD Secretary Alphonse Jackson resigned today. With so much unfinished business, it seems to be poor timing for a change at the top. Indeed, it may even be an unfilled position for the balance of the Bush presidency given the rancor between the Oval Office and Capitol Hill. With FHA Modernization stalled--again--it looks like several groups of Americans will be left out in the cold--again. So, who are the losers and winners?
Seniors are losing out because FHA Modernization contains both a nationwide loan limit of $417,000 and a reduction in the origination fee to 1.5% from the present 2%. The provisions to use a HECM reverse mortgage to purchase a home is also contained in the bill. Two groups with differing goals were able to work out a compromise that satisfied both AARP and NRMLA [National Reverse Mortgage Lenders Association].
Americans in low cost counties lose out, too. Without the automatic provisions contained in the bill, increased loan limits--which are far below conventional and even VA limits--will move only at a snail's pace and place more people into loans that are not good choices or no loans at all. High cost areas also feel the pinch.
Non-home buyers who operate businesses that prosper when homes are being purchased lose out. Sales of appliances, building materials for home improvement projects, furniture, bedding, curtains and many other household goods suffer. This in turn affects those who work there or could work there.
So, who wins? Well, politicians do. They can talk about all these things they would like to do in order to garner your vote. Of course, if they would quit grandstanding and start working out their differences on the bill, they could talk about accomplishments instead. But, for now they may simply choose to blame the HUD Chief resignation.