I think often timeswe are quick to pass blame on the consumer when financial institutions and the same federal governement who played a HUGE role in the financial crisis of 2008 were largely at fault. And guess who paid them, when they "defaulted" their investors(who are comprised of taxpayers/not just big fat cats on wall street/regular people who followed the rules and were screwed by a fraudulent system).
FHA is no more than a governemt "controlled" deterrent [kinda makes you wonder which party is for "the little guy"?]. Its not meant to help the little guy. I quite frankly do not understand why people coninue to peddle this idea? MOST can only use this with the help of family,friends and government subsidies(also paid by other tax payers) But what about the middle class that makes too much for this but not enough to be considered well off[I call this the housing donut hole but theres no "part D" fillers]. Fannie Mae and Freddie Mac wil cause another housing bubble due to their OVER reactions via regulations. As interest rates rise, what the borrower can get approved for now goes down and simultaneously home prices will continue to rise while rent prices skyrocket which makes even the most financially responsible person harder to save for a down payment[would an average 5-10 years which means the house you started saving for5-10 years ago depending on the location is now 100k more than it was before and the 3.5%,5%,20% you saved is NOW not enough). Also, DPA programs have income limits, typically given in high property tax proned areas (common for city living where home prices are high) so I don't see how this is supposed to help the average joe making 55k[someone who makes too much for the DPA program but not realistically enough to keep DTI low].
I am simply trying to offer a new perspective. I don't like blaming good borrowers caught in a [bank govt hell storm] and act as if the banks and even government are the good moral financial leaders. Everything affectsyour score. You make ONE mistake and a credit score will ALWAYS remind you for at least 7 years. The lenders don't care you made 5 years of on time payments, just care about your score is a 600 now because of ONE mistake which can lower your score by depending on the mistake up to 10-100points.
