If the Frederal gov't just lent the monies to the homeowners at bank rates ,appox. 4.5%.Would that work?

Question

If the Frederal gov't just lent the monies to the homeowners at bank rates ,appox. 4.5%.Would that work?

Answer 1

Probably not - because then they'd have to hire all the employees and give salaries & benefits, and incur all kinds of overhead, running the government mortgage department.  

And governmental agencies are the MOST expensive way to run ANYTHING.  Where the private sector might have 20% overhead/cost, the government agencies run closer to 80% overhead/cost.  Plus, they are subsidized by taxes.

I don't know about you, but I feel I pay enough in taxes already.

Answer 2

there are costs above that 4.5% to process and verify loans and set aside for bad debt.