FHA insured Mortgages a diaster for the country?

Fin 180
Erica Mendoza

FHA Insured Mortgages, a disaster for the Country?
When you ask someone what the “American Dream” is to them, most people will respond that owning a home is the “American Dream”. That is precisely what FHA insured mortgages have enabled many Americans to do. I myself included have been given the opportunity to fulfill one of my wishes of owning a home through this program. With the recent real estate market crash many have placed the blame on this program. So is FHA insured Mortgages, a disaster for the country?
After the Market crash of 1929 Congress looked for a way to boost the economy by encouraging hesitant banks to write mortgages. This is how the Federal Housing Administration (FHA) came into play; it was authorized to provide insurance for mortgage loans back by full faith and credit of the Unites States. As well, as becoming the key to the American dream by helping lower income families get into a home that they would have otherwise been unable to afford. Since then, it has become the largest insurer of mortgages in the world. In fact, since its start in 1934 it has insured more than 34 million properties (Jurow, 2010). FHA also became a huge stimulate to the country in the form of home and community development, which like a domino effect brings that down to local communities in the form of building contractors, schools, tax bases, and most importantly jobs. FHA has proved to be one of the best government agency operations. As a matter of fact, it’s the only government agency that operates entirely from its self-generated income, costing the tax payers nothing (2006). The way that it functions is that the money that is collected from the mortgage insurance charged to the homeowners is then set into an account that is used solely to operate the program. This mortgage insurance is what FHA requires in order to provide lenders with the protection against losses, because FHA will pay a claim to the lender in the event of a homeowner’s default.
In the more than 60 years since FHA was created much has changed, with that it’s lending practices. Unlike conventional loans that stick to strict underwriting guidelines, FHA insured loans involve little cash and therefore are considered more lenient. A key component in the economy is the housing market; FHA is a big player in the housing market. That is why many have placed the blame on it for having such lax lending practices and causing the collapse of the real estate market. Could FHA really be the one to blame? Looking at the whole picture it did play a part in the collapse but, it wasn’t the sole reason. What the government is looking to do now is mend the situation by changing some the FHA guidelines. In August of 2010 President Obama signed a bill that would give HUD the flexibility to increase Annual Mortgage Insurance Premiums. “This would allow HUD to increase the amount of Annual Mortgage Insurance Premiums from .5% to 1.5% on loans with a down payment of 5% or more. On loans with less than 5% down payment increase could be from .55% to 1.55%” (2010). What this means to future FHA homebuyers is simply that if they don’t want to have to pay a higher mortgage insurance premium they will need to come in with larger cash down payment. With these new guidelines the government is looking to try to prevent more purchases that could potentially default.

In conclusion, FHA has helped spark the production of many homes that have given some the opportunity to own a home that otherwise would never have been able to through traditional conventional lending. With that opportunity comes the feeling of ownership and that is something so strong and difficult to explain until you have your own home and grasp your set of keys you wouldn’t understand. It’s the feeling of comfort, family, stability and accomplishment. That feeling is something you can’t put a price on. To say that FHA was the sole reason behind the real estate market crash would be foolish. I do think that it played a role in it but, it’s working to mend the situation and prevent that from reoccurring in the future.



REFERENCES

FHA Mortgages Insurance for FHA Loans (2010). Retrieved March 20, 2010. http://www.fhaloan.com/fha_mortgage_insurance.cfm


HUD-The Federal Housing Administration. (September 2006). U.S. Department of Housing and Urban Development Retrieved March 19, 2011
http://www.hud.gov/offices/hsg/fhahistory.cfm

Jurow, Keith (August 9, 2010). World Property Channel. FHA insured mortgages, a disaster in the making? Retrieved March 20, 2010 http://www.worldpropertychannel.com/us-markets/residential-real-estate-1/real-estate-news-fha-mortgages-mortgage-backed-securities-mbs-federal-housing-administration-fha-department-of-veterans-affairs-va-congress-home-loans-keith-jurow-2969.php


Quam, Mike (June 6, 2010).Real Estate News. HR 5072 Good or Bad? Retrieved March 18, 2010. http://mnrealestatenews.com/2010/06/17/hr-5072-fha-reform-good-or-bad/

How Apple's Supply Chain Fared During the 3G Rollout

The article that found discusses how Apple’s supply chain stood up after the launch of the 3G iPhone. According to the article Apple’s physical supply chain processes including manufacturing, inventory and logistics worked very well what the part that fell behind was its digital supply chain. In which lots of customers from 21 countries had to wait a long time to get onto iTunes and be able to go through their final stage of syncing their iPhones. In an AMR research conducted in 2008 about the “Supply Chain Top 25” Apple took the number one spot with its magnificent software interfaces and top design goods. Apple was able to beat the competition with its mechanical and financial benefits and high inventory turns with minimal material and capacity limitations to grow that has allowed them to have a zero-marginal cost on its digital supply-chain. The success of Apple being able to meet the demands of its customer for the Apple 3G iPhone came with the Apple making the essential components well in advance and upgrading the basic information systems so that it could meet the high demand of customers on the iTunes store. Relating the article to our chapter we see how it is essential for a business to have a good supply chain because it gives them the ability to meet the demands of its customers at a faster pace and in a more seamless manner. Like Apple, Dell’s success came from the ability to maintain close contact with its customer and removing the middle men and by at same time having a close relationship with its shippers and manufactures.

Wailgum, Thomas (2009). How Apple’s Supply Chain Fared During the 3G Rollout. Retrieved October 13, 2009. From PC World: http://www.pcworld.com/businesscenter/article/148429/how_apples_supply_chain_fared_during_the_3g_rollout.html

Chapter 7: Networks, Telecommunications, and Mobile Technology

Upcoming Technology Promises Improved Mobile TV

This article is about the upcoming technology system mobile technology IMB (Integrated Mobile Broadcast) developed by IPWireless. IMB technology will open the door for more mobile TV channels and better picture quality. This new technology makes it possible to use more bandwidth per channel, along with allowing operators the ability to offer more channels to its customers. Mobile TV isn’t the only application that IMB can be used for, it also allow any application that needs to be sent to a lot of the same data to a large number of users the capability to do so. Along with this capability you’re also able to use digital radio, application and content downloads, as well as access internet services.

One of the downsides is that in order for IMB to work you phone needs to be equipped with an IMB chipset. To solve this problem IMB is coming out with an accessory that will be added to your phone. IMB decided to go this route instead of trying to get phone makers to include the chipset on the phones because they are looking for the right phones that can provided the services to support Q3 or Q4. Although it hasn’t been integrated into any phones yet some companies that are supporting the new IMB include: SingTel, Softbank, Telstra, T-mobile and Vodafone. By demonstrating the support of this companies we can see how this is something truly innovative that will be in high demand soon. As we learned in chapter 7 having a business will full online capabilities is very important now a days. By having a system such as IMB business are able to transmit more data at a faster pace and to larger amount of customers. By IMB providing more bandwidth the frequencies will allow for better picture quality of videos that you can send to customers or potential customers.

Ricknas, Mikael (2009). Upcoming Technology Promises Improved Mobile TV. Retrieved October 7, 2009. From PC World: http://www.pcworld.com/businesscenter/article/171667 /upcoming_technology_promises_i...

Chapter 6: Databases and Data warehouses

This article discusses the battle between Google and Microsoft with the latest news being the launch of Google’s operating system that will compete with Windows. Windows launched its new search engine Bing which hopes to take away from Google’s market. The article states that Google made $22 billion in revenue in 2008 of which 97% of it came from tiny text ads bought by the keyword and placed next to search results the other comes from online apps for businesses. As r Microsoft they sold $14.3 billion worth of Microsoft Word and PowerPoint and other business application which has given them a profit of $9.3 billion. It made an additional $16 billion through sales of its operating systems, which includes: XP installations on net books, Vista, Windows Mobile and server software. As far as both of their operating system Microsoft leads the way with its tight customer base that is accustom their operating systems it has proven to help them against innovators and helped them be the leader in operating systems. Google has just stepped into operating systems in 2007 and but has yet to launch any system. Comparing them as far as their advertising Google is clearing the winner with its advertising success and innovative action based text ads. Microsoft has not made money on the Internet but it hopes to change that with the introduction Bing that promises online office with more fully features than that of Google. Relating this to class lecture we see how data websites are filled with helpful tools that allow users to retrieve helpful information. These data websites have to constantly be innovating and introducing new ideas to their website to capture their online audience.

Singel, Ryan (2009). Goggle vs. Microsoft: What you need to know. Retreived September 30, 2009. From CNN Technology: http://www.cnn.com/2009/TECH/07/15/google.microsoft.battle/index.html?iref=newssearch

Chapter 5: Enterprise Architectures

The article that I found is about Intel’s new line of processors called Jasper Forest. The new processors offer distinctive functionality to help intense server environments such as storage and communications environments. The new Jasper Forest processors not only offer more storage but also reduce power consumption by 27 watts. The way they managed to do this was by integrating some I/O functions into the processor which eliminated the need for a separate controller and helps reduce the overall power consumption. The best feature of the Jasper Forest processors is the prevention of data loss that is done by the use of Asynchronous Dynamic Random Access Memory Self-Refresh Memory. What this does is it detects power failure as it is occurring and it allows the memory controller to complete its functions before shutting down so that nothing is lost. Along with having such great functionally Intel’s Jasper Forest comes backed with a seven year support for their customers so that they can purchase with assurance knowing that they will have support that they need in case something occurs. As we have learned in this chapter information architecture is about information security, disaster record and backup and recovery. What Intel has done is develop a processor that can both backup and recovery information that had not been saved before a power outage. This type of recovery and backup saves organizations money and time in having to start all over on the data they were working on before the outage. Having well developed information architecture is vital to an organization because they need to be able to keep the information secure so that others can’t dispose of it. Along with being able to secure it they need to be able to backup and recovery information since you never know what type of a disaster can occur.

Bradley, Tony (2009). Intel’s New ‘Jasper Forest’ Chip Improves Performance with Less Power. Retrieved September 21, 2009. From PC World:http://www.pcworld.com/businesscenter/article/171932/intels_new_jasper_forest_chip_improves_performance_with_less_power.html

Chapter 4: Ethics and Information Security

The article that I found is about an unauthorized advertisement that was displayed on the NYTimes.com site and that used fake malware warning to trick viewers into installing scareware. People that where on the NYTimes.com and that accidentally downloaded the software ended up with a non-threatening program called Personal Antivirus. What this article demonstrates is how important having a protection against virus is because as we have read in this chapter downtime for a corporation can accumulate to thousands of dollars. Its’ especially important for an organization that has so much online traffic to be able to control and prohibit viruses and hijacks from attaching to their websites. Having a good IT line of defense it vital for any organization that does business over the internet because it they manage to filter into the organizations systems they can obtain a lot of personal information from both the company and its customers. By having the right line of defense an organization can protect itself and its customers. It was a good learning experience for the NY Times because now they will have the chance to go into their systems and correct the problem so that other potential unauthorized advertisements don’t make it on their website. It’s also vital for the protection of its users to also take precaution, because a site that may seem clean of virus might have hijacks. This event is a good example of why one should take precautions and have at least a basic antivirus protection, because even sites that might seem harmless could host or contain viruses.

Larkin, Erik (2009). Learning from the NY Times Attack Ad. Retrieved September 14, 2009 from PC World website:
http://www.pcworld.com/article/171941/learning_from_the_ny_times_attack_ad.html

CHAPTER 3: EBUSINESS

This article discusses the new developments that Apple has done to improve some of their current features and products. Apple revealed that some of the new features added to the new iTunes stores include easier navigation and a new feature that will allow you to download song lyrics, art, band and song information (CNN, 2009). A huge feature that many iPhone and iPod Touch users will appreciate is the new application that will allow users to download ringtones for $1.29 each. This is an immense development that will save customers time from having to create their own ringtones, with just a touch of a button and a small fee they will now be able to use their favorite song as a ringtone. The most exciting news revealed from Apple was that the new iPod now included video camera. By Apple adding this new feature their product they are setting themselves apart from other mp3 players. No other device that I know of includes video cameras. Along with the new feature Apple is now cutting down the prices on their iPod’s in an effort to make their products more affordable and to draw more customers. As we discussed in chapter three what Apple is doing is sustaining its technology and making improvements to their products that in the end is making their product more appealing to its customers and the public. They aren’t coming out with a ton of new products but instead fine tuning their current products and offering more features on them than before. This is what sets an Apple product apart from its competitors their ability to innovate and improve.

CNN (2009). Steve Jobs returns, introduces new iPods. Retrieved September 9, 2009 from CNN Technology web: http://www.cnn.com/2009/TECH/09/09/apple.music.event.jobs/index.html