and fha backing these loans and the wags are talking about souped -- this soups like 2 show2007and 08 back 37 then. they said we have to get people into homes. they did inappropriate things to get people into houses. you put a person in a house they can't afford, you are not doing them any favors. lou: you are sure doing the bank a favor. >> unfortunately, we're not going to lit that happen during this administration. lou: good to know, it sounds like a terrific program. at same time mortgage debt top p topping levels of two,00 -- 200. therefore, it is a good sign it is rising, is that correct? >> it is a supply and demand issue. this is rising, there are more people who are actually able to get into the market because of the job market being so good. we have 7 million jobs available and 6 million people looking for jobs. that does not take into account people who dropped out of the job market. there are a lot of perverse incentives that government has put in place over a long period of time, they have to be removed much we have to look at the problems in a holistic manner, federal, s

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i picked the 620 pretty much the minimum for an fha loan >> you're saying that you can expand access some are at the cut off. >> 620 of those 10 million, about 2.4 million are african-americans and latinos that can't otherwise get a score. so not all those ten million will be house ready or want to buy a house, but we're talk iin about millions more that could qualify. >> the way you do this is by needing about four weeks of ak tift where fico needs about six months to establish a credit score. >> as a former lender, you say how can you trade a score on a one month usage. we tested that with vast amounts of day the the new score will score, they're probably the fault which is what a score does measure probablity and default is about the same as long-term borrowers. it's incredibly accurate >> why do they flip-flop looks like fha were going to make people not use the vantage score. >> the new director is following the law. we're very grateful r for that the former director was not following the law. >> we'll see what impact it has. i know it could take a couple of years. thanks for jo

>> well, the fha does tend to have the highest delinquency rates relative to all government programs.o i think a tightening there is certainly overdue, particularly when you're talking about those instances where people might be taking cash out. the fha is really defacto lowdown payment program for the lot of first-time home buyers, delinquencies tend to be higher. i don't think that is necessarily problematic. i think that is prudent, given the fact that the economy is still strong but we may well be at a peek in the economic cycle, if things start to slow, you don't want delinquencies, defaults starting to pile up. neil: in other words pierce the bubble before you have a bubble i guess. greg, good chatting with you. have a good weekend. >> appreciate it, neil. neil: we're following a lot of other developments on the world front that have nothing to do with china. blessedly concerns other crises that could be potentially bigger. north korea third time this week firing off missiles. why do they keep doing that? tensions with iran, all of sudden right now with a nuclear treaty we just

s ilck: fimers have passed, and the garner fhas been pressing for a long time for the oncking of daniel pantaleo. one of the reasons it ok so long was the criminal justicepl system had t out. there was a grand jury that decided not to bring charges agnst him in staten island which is where eric garner died. and then the justice department, rafe prosecutors decided they would not seek criminal prosecution, because they thought there was insufficient evidence. an internal disciplinary procedure started within the nypd. earlier this month a judge thin the new york police department said he was guilty of the recommendation was that he should be fired and that is with oat that -- and that is what commissioner ja'neill announced today, the daniel pantaleo would be sacked. sophie: there is been such a huge amount of focus on the case. what was the reaction? nick: huge amount of focus. this is one of the landmark cases in the black lives matter those words "i ca't breathe," which he uttered 11 times,e whil was being held in that chokehold, became a rallying cry against police bruty.aigners the

neil: this is tangential to housing but the fha is revising home equity, loan rules, you can't cash out5% of equity on the home. more like 80%. and other, you know, more tightening up here. why are they doing that? and are you worried that this is going to put a crimp on home buying activity? >> yeah. i think the reason why they're doing that is because the top of mind everyone has is the example of, you know the housing bust and boom. that really was driven by excess credit. so rolling back credit, making it a little bit tougher is keeping the system healthy because right now, what even drove us to the fact that home values are slowing down now because home values were really overexuberant, right? growing too fast a pace. a lot had to do with low inventory, strong demand, crazy bidding wars. everyone knows the struggle of the first-time homebuyer. i'm not that worried. why am i not worried? if i think about housing over the long term, next five years, every year, for the next seven or eight years, more people will be entering early 30s than the year before. that is prime first-time hom

well, fha loans actually performed much better than subprime loans during the last crisis. there's a low down payment, i understand that, we still see pretty good performance out of fha. we want to have a large number of first-time home buyers to be able to be homeowners because they are often paying less than the rent, and we want to be careful about how we underwrite mortgages. but we don't want to be so cautious that we end up really constraining the economy. in a recession, with the yield curve numbers, it's reasonable to expect something's coming. we usually count on housing to get us out of recession, not into it like we had last time. we don't want to end up with a stagflation situation in housing, where prices keep going up but the economy keeps going down. >> why does the government have to do that? we have private sector, private lenders, private banks. shouldn't they take care of this rather than have the taxpayer ultimately on the hook if something goes wrong? >> i think that's a reasonable argument except that it doesn't actually work in the economy, and you en

dagen: this is a proposal by the -- >> ben carson, the fha, which i think is the best news i heard ally're millennials, right. >> they have a lot of student loan debt. and they really need that extra help from the government to be able to buy a home. dagen: which of the housing markets look the most l solid right now, dolly? >> first-time home buyers, oddly. they're the ones anxious to get in. they are all chomping at the bit to buy something. any new listings, anything new, that's the strongest part of the market, oddly. >> what about manhattan? there was a report that came out that rents jumped 6.5%. how do millennials or those just entering the workforce starting new jobs in new york city, how do they afford that? >> well, they have a lot of trouble or they have a roommate or they have a parent. dagen: or jenny, you buy. jenny bought. >> i did. i did. but it's true. we're really struggling right now. rents are up. in the rent, buy analysis, it makes sense mostly to rent. that pushes rental prices up which means we can't afford anything and we have to live with three people, to an ap

rules are requiring only 3.5% down and lower credit scores than conventional loans if you get that fhalate things. talked about this on monday, where certain pockets of the country where prices are up and inventories are tight but a lot of places are building as well. seems that the administration is trying to stimulate those areas. but it's something certainly to watch, not necessarily a huge red flag just yet. dagen: john, what do you say? >> i think you're exactly right. it's not a red flag. the ratio of mortgage debt to personal income is much lower today than it was back in 2008 and how interesting that we had to wait 11 years to return to that record high which tells me there's basically no growth during that period from 2008 to today. >> we had a housing bubble and it popped. it would make sense this would climb back slowly and it didn't do it in too quick of a time. >> also, the average price of homes relative to personal income is, again, significantly lower today than it was in 2006, 2008. nothing to become frightened about. but this relaxation of mortgage lending standards,

so he's expected to announce today an fha-backed program where you can have a low down payment loan for time home buyer to get a condo. this is good for the high-priced markets like new york or austin or denver. the question is, in this environment, in this climate, are we doing what we did during -- that led to the crisis, are we doing it all over again? >> that is absolutely addressing the big issue with millenials not buying, which is they're renting and rents are high so they can't accumulate the down payment. that has been the explanation for why sales to millenials which are the people who should be starting home buying -- lauren: they want to live in expensive cities. a survey just came out that said just 12%, that's it, of people want to buy a home in the next year. that's a low number. they need to juice the housing market which the biggest problems for housing, as we say all the time, the price of a home and the supply of a home. stuart: thank you very much indeed. before we go to the opening of the market, and we will open down, i want to bring you this news on hong kong. fli