Housing risks revisited

We have mentioned several times previously of the (still) somewhat below the radar problems with FHA, Fannie Mae and Freedie Mac- collectively representing government involvement in the residential mortgage market. New home sales and foreclosures have risen in the past few months. The general narrative proffered in the media is that the formerly risky lending by these lenders has all but ceased. NOT!! In 2006 the percentage of loans with low income to payment ratios and weak credit equalled 17% of the total. Today, these type risky loans account for 23% of the total! The upshot is no lessons have been learned and in many if not most areas housing may still have a ways to go before reaching bottom.