I just got these mortgage rates from one of our local lenders:
30-Yr Fixed FHA 4.125%
30-Yr Fixed Conventional 4.625%
Is this crazy? The govt WANTS to be in the mortgage business when Fannie & Freddie are drowning already?
There have been some changes to FHA, like the eternal mortgage insurance (which previously disappeared when you reached 20% equity). They need this so that those people who actually continue to make their mortgage payments can help pay for those who end up in foreclosure ... which have been swamping the FHA mortgages in recent years.
I'm a Realtor®, and of course, I want to sell houses ... but I'd rather sell them because more people are getting jobs and better jobs ... not because FHA is begging them to buy a house to stimulate the economy.