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-- on all this we're joined by someone who works -- builders lenders and investors John burns and CEO of John Burns real estate consulting in Irvine California.
John you just heard with Peter said we're not gonna know until feb if this actually is even needed what does it mean for homeowners in the interim.
Well actually had any also said we've been reporting on this since 2009 so we we've been knowing this is coming for a long time and all the losses actually relate to all the insurance from 2006 to 2009.
From 2010 on they've been making money.
So I I think the real -- home buyers is that somebody overreaction calls this a bail out and says hey let's stop FHA doing what they're doing.
They're the only high loan to value program out there and they're making money.
If we stop that in this fragile recovery which you've you've called -- earlier will no longer be a recovery.
Well that's the thing right I -- they -- increase insurance premiums which Peter just reported they have been doing.
The loans they're making now are much better loans than they were making 20072008.
To their portfolio going forward is okay.
Do we have to worry about -- all the loans they're holding that -- at least ninety days delinquent.
Other although losses associated with that are already priced into this and they've got better data now than -- they did before so I think.
We can worry about I think the biggest concern though is that if we have any sort of hurt our job losses that's when FHA gets hammered because those are people that are living paycheck to paycheck.
We gotta make sure the economy is growing FHA I think will be fine.
So you're not concerns it sounds like that FHA's gonna need this bail out the end.
While I'm concerned if we have a recession I think you're you're given in the book that they've been putting on and they've been raising fees actually -- insurance premiums the last several years and the banks have fallen to the -- the banks to voluntarily said we're not even -- underwrite FH is most riskiest loans they're they're not going down to the riskiest stuff.
That they're doing okay right now that the big issue is that the fiscal -- -- debt crisis and all that stuff which we have to keep the economy growing.
Let's talk about the housing market then and not -- other stuff because they have a market is really trying to show signs of improvement.
All this stuff could set it back.
You know I'm not overly concerned.
If you didn't just step back we've got at one point nine million jobs and only -- 800000 housing units in the last year that's a two to one ratio.
Affordability from a payment to income standpoint is the best in my lifetime.
The resale volume is getting soaked up a lot of these big guys that have come in and bought the distress are driving prices up.
-- in FHFA sold the portfolio and took a write up on there -- your portfolio recently so.
The market is definitely recovering.
We just it won't recover if interest rates go way up or if the economy falls.
Yeah and I guess that's when homeowners start to worry.
John Burns thanks for being optimistic for us today there's been a lot of -- -- around here we needed that thank you.
-- -- -- -- coming up -- really sad day for an iconic American brand host is closing its stories after a devastating battle with unions.
Sad day for the workers as well Gerri Willis on that story in next but first let's take a look at some of today's winners and losers as we head out to break.
The -- eyes turn negative actually down two points right now with some winners on the -- -- -- home -- -- about multi group up almost 3%.