Dr. Housing Bubble — FHA loan guarantees now amount to $1.1 trillion: Upcoming changes to FHA mortgage insurance premiums and the cost of low down payment loans.

FHA insured loans stepped in to take up a lot of the slack when other low down payment loans exited the market in 2007. FHA insured loans are still a low down payment option requiring only 3.5 percent down but at least with these loans, some level of due diligence is done when looking at potential borrowers. Yet over the last few years, FHA insured loans have gone from a tiny piece of the housing market to now being up over $1.1 trillion in loan guarantees outstanding. The housing market is now becoming largely bimodal with all cash buyers picking up better properties while those with barely any down payment funds opt to go the FHA route. Given how expensive FHA loans have become, it is apparent that a large portion of the population doesn’t even have enough to enter the housing market without 30x leverage. Changes are also coming to FHA insured loans that will make them more expensive in a few months. Why are these loans getting more expensive when the housing market is supposedly robust?

Dr. Housing Bubble
FHA loan guarantees now amount to $1.1 trillion: Upcoming changes to FHA mortgage insurance premiums and the cost of low down payment loans.

Geithner out at the end of the month, Jack Lew in at Treasury

Geithner doesn't want to go through the debt ceiling lunacy again, so he's leaving before the shit hits the fan. And replacing him will probably be Jack Lew, who is currently serving as White House Chief of Staff.

Lew ran Citigroup's Alternative Asset Unit from 2002 to 2006, basically overseeing a hedge fund type operation that was betting against the housing market even as Citi was making billions in new subprime loans and mortgages.

Conflict of interest? Unethical? Illegal? Ya think?

Say hello to our 76th Treasury Secretary.

Only on Wall Street, kids...only on Wall Street.