FHA Watch, May 2013 (Vol. 2, No. 5)

Article Highlights

  • FHA capital position slightly better in April.

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  • National Association of Realtors aims to make FHA lending policies even more unsustainable.

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  • FHA lending policies promote cycle of failure for working-class families.

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Explore the Nightmare at FHA project.

This Issue’s Highlight

Forty percent of recent government-guaranteed modified loans redefault within 12 months

In another example of the Federal Housing Administration’s (FHA’s) mission failure, the redefault rate after 12 months on government-guaranteed modifications (government mods) hovers around 40 percent for loans modified in 2010, 2011, and 2012. This is double the failure rate for all other loan mods made by the government-sponsored enterprises (GSEs), private investors, and portfolio lenders. Government mods relate to loans insured by the FHA or Veterans Affairs (VA), with a high proportion relating to the FHA. Notwithstanding this stunning level of failure, another 36,000 government-guaranteed loans were modified in quarter 4 2012. 

This is yet another example of the nightmare at FHA—policies that promote a cycle of failure for working-class families.
 
This Month’s Features

Continuing the Nightmare at FHA
The National Association of Realtors Calls for Unsustainable FHA Lending

Spotlight on Insolvency
FHA’s Estimated GAAP Net Worth Equals –$27.36 Billion, with a Capital Shortfall of $47–67 Billion

Spotlight on Delinquency
Overall Rate Declines to 14.68 Percent

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

Spotlight on FHA’s Mission Misfires
Forty Percent of Recent Government-Guaranteed Modified Loans Redefault within 12 Months

End the Nightmare at FHA
Common-Sense Reform of the FHA Is Urgently Needed

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