The Federal Housing Administration reports that delinquencies on FHA Insured mortgage loans are down.
Many in Congress are worried that the Federal Housing Administration will fail in its attempt to save, bolster and support the crashing housing market. Too many pessimists—and those without a thorough understanding of the longevity of the FHA and it’s ability to weather previous storms—see a future taxpayer bailout of the vaunted agency.
At the end of 2009 and into 2010, HUD (which oversees FHA) took some serious steps towards reigning in potentially damaging loans and Lenders. FHA closed the door on many Lenders who abused the FHA system and subsequently had high default rates. FHA proposed important changes to manage risk on its package of insured loans, including the appointment of a Risk Manager, the increase of the Upfront Mortgage Insurance Premium (which goes into effect April 5th, 2010), and other important changes to the program to protect the viability of FHA to continue to insure mortgage loans for Americans.
It’s not often you see immediate effects from policy changes in an organization as large as HUD, but there it is: FHA statistics report a reduction in delinquencies of FHA Insured mortgage loans. This change is not very large by the standards of current originations, but it’s certainly a good start.
I’ve been originating FHA Insured mortgages since the day I started in the mortgage business in 1989. I have always believed the FHA truly fulfilled its original Congressional mandate from 1934 to make it easier for Americans to become homeowners. I have helped so many families over the years with FHA Insured loans. I’m thrilled to hear this very positive news in a time when good news about anything housing or mortgage related is a rare thing indeed.
I’m still originating today mostly FHA loans as it seems to be the only way most families in the New York Metro region can manage to qualify to buy a home. I have full faith and confidence in the ability of HUD to maintain its potential to insure mortgage loans.