FHA Watch, September 2013 (Vol. 2, No. 9)

Article Highlights

  • If a loan performs like subprime, it is.

    Tweet This

  • FHA lending policies continue to harm low-income and minority families.

    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:

Explore the Nightmare at FHA project.

This Issue’s Highlight

FHA’s Disproportionate Impact: Default by Design

The Consumer Financial Protection Bureau’s (CFPB’s) new Qualified Mortgage rule exempted Federal Housing Administration (FHA) underwriting standards until 2021. The subsidies and exemptions FHA-insured loans enjoy generally qualify them for the CFPB’s designation as “prime loans.” Yet, an FHA 30-year fixed-rate loan with 4 percent down, a 43 percent total debt ratio, and a 580–599 FICO has an expected foreclosure rate of 28 percent. The CFPB calls these loans prime, but if it performs like subprime, it is. This lending standard is having a disproportionate impact on low-income and minority families.

This Month’s Features

Spotlight on FHA’s Disproportionate Impact: Default by Design
Subprime by Any Other Name Is Still Subprime

Spotlight on Property Valuation Practices from 1903 to the Present
FHA Has Abandoned Former Boom-Resistant Practices

Spotlight on Insolvency
FHA’s Estimated GAAP Net Worth Equals –$26.68 Billion, with a Capital Shortfall of $47–67 Billion

Spotlight on Delinquency
Overall Rate Increases to 15.03 Percent in August from 14.94 Percent in July

Spotlight on Best Price Execution
FHA, VA, and USDA Pricing Advantages Largely Unchanged

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Edward J.
Pinto

What's new on AEI

Expanding opportunity in America
image Moving beyond fear: Addressing the threat of the Islamic state in Iraq and Syria
image Foreign policy is not a 'CSI' episode
image The Air Force’s vital role
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Monday, July 21, 2014 | 9:15 a.m. – 11:30 a.m.
Closing the gaps in health outcomes: Alternative paths forward

Please join us for a broader exploration of targeted interventions that provide real promise for reducing health disparities, limiting or delaying the onset of chronic health conditions, and improving the performance of the US health care system.

Monday, July 21, 2014 | 4:00 p.m. – 5:30 p.m.
Comprehending comprehensive universities

Join us for a panel discussion that seeks to comprehend the comprehensives and to determine the role these schools play in the nation’s college completion agenda.

Tuesday, July 22, 2014 | 8:50 a.m. – 12:00 p.m.
Who governs the Internet? A conversation on securing the multistakeholder process

Please join AEI’s Center for Internet, Communications, and Technology Policy for a conference to address key steps we can take, as members of the global community, to maintain a free Internet.

Thursday, July 24, 2014 | 9:00 a.m. – 10:00 a.m.
Expanding opportunity in America: A conversation with House Budget Committee Chairman Paul Ryan

Please join us as House Budget Committee Chairman Paul Ryan (R-WI) unveils a new set of policy reforms aimed at reducing poverty and increasing upward mobility throughout America.

Event Registration is Closed
Thursday, July 24, 2014 | 6:00 p.m. – 7:15 p.m.
Is it time to end the Export-Import Bank?

We welcome you to join us at AEI as POLITICO’s Ben White moderates a lively debate between Tim Carney, one of the bank’s fiercest critics, and Tony Fratto, one of the agency’s staunchest defenders.

Event Registration is Closed
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.