FHA Secretary, Julian Castro, tries to make Housing Sexy with Jon Stewart and His Audience.

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Reaction: I thought this interview was excellent. I thought Jon Stewart did an concise job of bringing up a lot of general reservations people have in regard to housing, especially for millenials. 1) Fear (from the financial meltdown), 2) capital reserves (the whole trajectory joke), 3) and cost.

In my opinion, fear isn't the greatest inhibitor for millennials buying a home. I largely believe it is a general transient spirit that prevents millenials from buying a home, in addition to student debt.

Julian, The Federal Housing Administration Secretary, is taking a pretty unsexy topic and attempting to lead a conversation that has not been established with the millennial generation.

Capital Reserves: The bit about Jon and Julian discussing trajectory probably did not make anybody feel good. For private banks, capital reserves have to be at 5% or the bank would be considered insolvent. The optimist would say loan issuance standards have been higher than in the past few years and despite that, the FHA has been able to issue enough good loans to increase the capital reserves. Sexy, right? If its hard to write a loan, and one makes all their money on loans, its impressive they are establishing a healthy and safe return.

The only input a Realtor can really give is about his buyers. To my knowledge, the buyers I know that undertook FHA loans in transactions have not defaulted on their loan. I would certainly like the FHA to have a higher Capital Reserve but it seems folks seem to be handling the current FHA loan product. In addition, hopefully Dodd-Frank has weakened derivative trading -- which it seems to have succeeded in doing based on Fortune 500 Bank companies reporting challenging earnings, often because of their trading desk. In short, the banks are having trouble making money trading assets like mortgages.

John poignantly asks Julian about banker's trading mortgages, which is what caused the 2008 Crisis, I think Julian could have done a better job answering that question. However, its a difficult question to answer simply.

Cost: Castro's primary intent was to discuss lowered mortgage insurance rates on FHA loans. Those insurance rates have gone down, so its now cheaper to have a low down payment loan through FHASo there you go millenials, its cheaper to buy a loan.

Feel free to ask me about the difference in FHA and Conventional loans. Or to share your take on the interview!