FHA Watch, March 2013 (Vol. 2, No. 3)

Article Highlights

  • FHA should implement VA lending best practices.

    Tweet This

  • FHA continuing to fail working-class families and communities.

    Tweet This

Subscribe to AEI's financial services emails
Articles and events on the financial services sector. Published approximately once a month.

First Name:
Last Name:
Email:
Zip Code:

Read Volume 2, No. 2, March 2013.
Explore the Nightmare at FHA project.

This Issue's Highlight

Veterans Affairs (VA) charges one-third the premium of the Federal Housing Administration (FHA) on a present-value basis and experiences a loss rate that is 20 percent of the FHA’s. VA mortgage-backed security (MBS) issuers absorb a loss rate 1.6 times that of FHA issuers yet are paid the same servicing fee and pay the same Ginnie Mae guarantee fee.

Implementing VA’s best practices, including reducing the FHA’s loan loss coverage percentage from 100 percent to 50 percent, would reduce the deleterious impact of FHA practices on working-class families and neighborhoods and help promote the responsible expansion of credit access to working-class families.

As demonstrated by the VA best practices over many decades, a coverage level well below 100 percent may be sustained without impacting the cost of FHA financing. Over time, the cost of FHA financing could go down.

This Month’s Features

Spotlight on Insolvency
FHA’s Estimated GAAP Net Worth Equals –$32.13 Billion, with a Capital Shortfall of $52–72 Billion

Spotlight on Delinquency
Overall Rate Declines to 15.97 Percent

Spotlight on Best Price Execution
FHA, VA, and USDA’s Pricing Dominance Little Changed

Spotlight on Differences Between the Practices of the VA and the FHA
Comparing the VA’s and the FHA’s Loan Loss Coverage Percentages

End the Nightmare at FHA
Fundamental and Comprehensive Reform of the FHA Is Urgently Needed

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Edward J.
Pinto

What's new on AEI

Defeating ISIS: AEI experts weigh-in before the president’s address on Wednesday
image Degrading, defeating, and destroying the Islamic State
image Wealth Building Home Loan: Building wealth through homeownership and retirement savings
image The $3 iPhone
AEI on Facebook
Events Calendar
  • 15
    MON
  • 16
    TUE
  • 17
    WED
  • 18
    THU
  • 19
    FRI
Tuesday, September 16, 2014 | 5:00 p.m. – 6:00 p.m.
The Constitution as political theory

Please join us for the third-annual Walter Berns Constitution Day Lecture as James Ceasar, Harry F. Byrd Professor of Politics at the University of Virginia, explores some of the Constitution’s most significant contributions to political theory, focusing on themes that have been largely unexamined in current scholarship.

Wednesday, September 17, 2014 | 8:10 a.m. – Thursday, September 18, 2014 | 1:30 p.m.
Third international conference on housing risk: New risk measures and their applications

We invite you to join us for this year’s international conference on housing risk — cosponsored by the Collateral Risk Network and AEI International Center on Housing Risk — which will focus on new mortgage and collateral risk measures and their applications.

Event Registration is Closed
Thursday, September 18, 2014 | 2:15 p.m. – 3:00 p.m.
Speaker of the House John Boehner on resetting America’s economic foundation

Please join us as Speaker John Boehner (R-OH) delivers his five-point policy vision to reset America’s economy.

Event Registration is Closed
Friday, September 19, 2014 | 9:15 a.m. – 11:00 a.m.
Reforming Medicare: What does the public think?

Please join us as a panel of distinguished experts explore the implications of the report and the consumer role in shaping the future of Medicare.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.