Wealthy Qualifying for Loans Meant for Low-Income Borrowers

[marmar]

(Bloomberg) Colorado’s San Miguel County is known as a winter playground with world-class skiing and mountain vistas, a place where homes can sell for millions of dollars.

If you’d like to buy, the Federal Housing Administration -- the agency created to aid low-income and first-time homebuyers - - can help. Not far from the ski resorts of Telluride, an FHA- approved borrower can pick up a five-bedroom, four-bath house with stainless steel appliances and a two-car garage for about $600,000.

The agency, created during the Great Depression, has found itself insuring high-dollar loans in hundreds of counties across the country, from New Jersey to Florida to Arizona. Such loans are drawing renewed scrutiny as lawmakers debate whether to expand FHA lending to even wealthier borrowers.

“It’s not the intent of the FHA to facilitate people buying McMansions,” said Representative Scott Garrett, a New Jersey Republican opposed to higher loan limits. “The intent is to help the average American buy the average house.” ............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-11-08/wealthy-qualify-for-mortgages-intended-for-poor-under-higher-loan-limits.html