Federal Housing Administration greenlights 40-year mortgages

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Start of house price rally! Probably only for entry level homes :hugs:

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Definitely. When mortgages went from 15 to 30-year, it launched a multi-decade run of home price increases.

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It’s for loan mortification when borrower is in default. Not for new origination

https://www.federalregister.gov/documents/2023/03/08/2023-04284/increased-forty-year-term-for-loan-modifications

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The number of non-FHA 40 year loans closed is miniscule and has never really been a market moving product. It’s simply a great headline that mortgage lenders and realtors can chat about, until the smarter folks in the room (thx Caiguycaiguy for the info) realize this 40 YEAR HEADLINE NEWS is simply “lipsticking a pig”. Given that it’s really just a loan modification scheme rather than a viable loan product, the industry shouldn’t even be chatting about this outside of the context of keeping homes off the market rather than going through the traditional foreclosure process.

About a week ago it was a CalHFA Shared Appreciation program that was making the rounds. Nice in concept, but the devils details sink the product as a viable solution to housing prices.

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