Big banks aren’t used to getting the love, but FHA Commissioner Brian Montgomery certainly sent some their way yesterday, telling the Wall Street Journal that newly-proposed FHA operational clarifications are designed to give banks the certainty they need to venture back to the government’s fold. However, the answer to FHA’s hopes isn’t in its own hands: it’s up to federal bank regulators. We expect them to be very chary of liberalizing the capital impediments to FHA lending at the height of the business cycle.
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