Friday, January 27, 2012

Another Example of Government Intervention in Real Estate

A new article is out regarding FHA certification of condo buildings for buyers trying to obtain low down payment FHA insured mortgages.

These types of mortgages attract mostly first time home buyers.  While the Sarasota area is not a mecca for first-time buyers, and our housing market is healthier than most, it's yet another example of supposedly well-intentioned government regulation putting a damper on the housing market.

The FHA "certifies" a condo building for approval for FHA financing based on financial health of the condo association and a raft of other analyses of condo ownership and legal issues.  Of course, the burden of providing paperwork to the FHA falls on the condo association management, many of whom are already scrambling with owners in short sale or foreclosure. 

To make matters even worse, the goverment apparently has not made rules and regulations for condo managers easily available.  Like the good public servants they are, the FHA hopes to actually publish it's condo certification rules in the Federal Register sometime this year for public comment.

In a typical government employee response, an FHA spokeswoman was quoted: "It's not really that onerous, a lot of it is just basic information".  Yet one condo manager states: "It seems like there's always something additional that the FHA wants."  Sound familiar?

The NAR has asked us to pay higher dues, so they can wine and dine and lobby Congress to "protect" the public and improve the real estate market, but it's my opinion that more intervention results in more headaches for the public and ourselves as Realtors.


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