FHA increasing loan limits for 2018

[Account Closed]

Apparently as prices are rising, FHA is increasing their limits to government backed mortgages on average by 6.4%: https://themortgagereports.com/34740/fha-loan-limits-are-increasing-thats-good-news-for-borrowers Someone posted another article that as wages aren’t keeping up with the rising price of homes, we could see an uptick in foreclosures. My question is, if these loans are backed by the government, what incentive does a bank have to sell the Note at a discount? How does this all work as I don’t see the benefit to us (maybe Goldman Sachs but not us)? Thanks

[Bob Okenwa]

Investors like to know they are buying a "safe" security so getting one backed by the government is safer theoretically than one that is not.