In this short excerpt from the “The Yaron Brook Show” podcast, Yaron talks to a caller about FHA loans and the possible consequences that follow. Are these federally insured mortgages, which are popular among first time home buyers, beneficial or are they actually a bad deal.
"Why is the government trying to get you to buy a house rather that rent a house? Why are central planners deciding what the home ownership rates should be in any country? It's none of their business," said Yaron. He elaborated by adding, "Politicians and central planners and treasury departments and the president of the United States should all stay out of it. One of the reasons for the 2008 financial crisis is exactly because of these kinds of things. The FHA is only demanding 7½ percent down on homes ... it puts you in a bad situation because, if home prices go down by more than 7½ percent, you now owe more on the house than what the house is worth."
Listen to the clip above or find the full podcast on soundcloud here.