{"id":7404,"date":"2009-03-09T13:11:00","date_gmt":"2009-03-09T20:11:00","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=7404"},"modified":"2009-03-08T16:48:55","modified_gmt":"2009-03-08T23:48:55","slug":"why-fha-loans-wont-be-getting-cheaper-or-easier","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7404\/why-fha-loans-wont-be-getting-cheaper-or-easier\/","title":{"rendered":"Why FHA Loans won&#8217;t be getting cheaper or easier&#8230;.."},"content":{"rendered":"<p>When the subprime market imploded and people starting rushing to FHA, the &#8220;chant&#8221; was that FHA is the new &#8220;subprime.&#8221;&nbsp;&nbsp; FHA originations skyrocketed and anyone who didn&#8217;t have a 700 credit score and a downpayment of 5 to 10% was quickly led into FHA.&nbsp;&nbsp; I remember reading statistics of different banks seeing a 150% jump in FHA loans. <\/p>\n<p>At that point, I had a sneaking feeling that we&#8217;d start seeing some of the losses that hit subprime translating over into FHA.&nbsp;&nbsp; Well,guess what, we are.<\/p>\n<p>The article cited below is about the fact that FHA is experiencing a substantial rise in what are called &#8220;Early Payment Defaults.&#8221;&nbsp;&nbsp; What does that mean?&nbsp;&nbsp; Substantially more of the newly originated FHA loans are having default issues than is typical. <\/p>\n<p>What does that mean going forward?<\/p>\n<ul>\n<li>Increased losses for FHA<\/li>\n<li>Tightening underwriting guidelines for FHA loans.<\/li>\n<li>Higher fees and rates for FHA loans<\/li>\n<\/ul>\n<p>Fannie and Freddie are already in trouble and now we&#8217;re looking at the first signs that FHA is heading for trouble too.<\/p>\n<p>Interesting times&#8230;.<br \/><a target=\"_blank\" href=\"http:\/\/straighttalkaboutmortgages.com\/\"><br \/>Tom Vanderwell<\/a><\/p>\n<p><a href=\"http:\/\/www.washingtonpost.com\/wp-dyn\/content\/article\/2009\/03\/07\/AR2009030702257.html\">The Next Hit: Quick Defaults &#8211; washingtonpost.com<\/a><\/p>\n<blockquote><p>The last time the housing market was this bad, Congress set up the Federal Housing Administration to insure Depression-era mortgages that lenders wouldn&#8217;t otherwise make.<\/p>\n<p>This decade&#8217;s housing boom rendered the agency irrelevant. Americans raced to aggressive lenders, seduced by easy credit and loans with no upfront costs. But the subprime mortgage market has crashed and borrowers are flocking back to the FHA, which has become the only option for those who lack hefty down payments or stellar credit. The agency&#8217;s historic role in backing mortgages is more crucial now than at any time since its founding.<\/p>\n<p>With the surge in new loans, however, comes a new threat. Many borrowers are defaulting as quickly as they take out the loans. In the past year alone, the number of borrowers who failed to make more than a single payment before defaulting on FHA-backed mortgages has nearly tripled, far outpacing the agency&#8217;s overall growth in new loans, according to a Washington Post analysis of federal data.<\/p>\n<p>Many industry experts attribute the jump in these instant defaults to factors that include the weak economy, <a href=\"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7404\/why-fha-loans-wont-be-getting-cheaper-or-easier\/#more-7404\" class=\"more-link\">Read more<\/a><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>When the subprime market imploded and people starting rushing to FHA, the &#8220;chant&#8221; was that FHA is the new &#8220;subprime.&#8221;&nbsp;&nbsp; FHA originations skyrocketed and anyone who didn&#8217;t have a 700 credit score and a downpayment of 5 to 10% was quickly led into FHA.&nbsp;&nbsp; I remember reading statistics of different banks seeing a 150% jump [&hellip;]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26],"tags":[302],"class_list":{"0":"post-7404","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","7":"tag-trouble-at-fha","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1355,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1355\/mortgage-minutes-with-the-fha-expert-old-skool-guvvies-may-solve-the-subprime-meldown\/","url_meta":{"origin":7404,"position":0},"title":"Mortgage Minutes with The FHA Expert:  Old Skool Guvvies May Solve the Subprime Meltdown","author":"Brian Brady","date":"April 30, 2007","format":false,"excerpt":"I interviewed \"The FHA Expert\", Jeff Belonger of www.theFHAexpert.com in this 18 minute podcast. This is my first interview so you'll notice two things: 1- I sound like the used auto dealer in a small town that bought the town's only radio station; I'll work on the delivery. 2- Jeff,\u2026","rel":"","context":"In &quot;Interview&quot;","block_context":{"text":"Interview","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/interview\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7402,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7402\/if-i-never-make-a-single-payment-on-my-super-cheap-fha-loan-do-i-still-get-my-8000-tax-credit\/","url_meta":{"origin":7404,"position":1},"title":"&#8220;If I never make a single payment on my super-cheap FHA loan, do I still get my $8,000 tax credit?&#8221;","author":"Greg Swann","date":"March 8, 2009","format":false,"excerpt":"WAPO:The last time the housing market was this bad, Congress set up the Federal Housing Administration to insure Depression-era mortgages that lenders wouldn't otherwise make. This decade's housing boom rendered the agency irrelevant. Americans raced to aggressive lenders, seduced by easy credit and loans with no upfront costs. But the\u2026","rel":"","context":"In &quot;Big Mother&quot;","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1382,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1382\/fha-streamlined-refinance-loans-originators-git-you-some\/","url_meta":{"origin":7404,"position":2},"title":"FHA Streamlined Refinance Loans: Originators, Git You Some !","author":"Brian Brady","date":"May 3, 2007","format":false,"excerpt":"Loan originators, subprime mortgage blues got you down in the dumps? Let's talk about a way to get your pipeline phat again. I'm going to give you a step-by-step plan to start, what Todd Duncan calls, the 90-day burn. If you follow these steps, and you don't close 10 loans\u2026","rel":"","context":"In &quot;Real Estate&quot;","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10960,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10960\/my-jim-casey-take-on-the-fhas-policy-to-address-risk-and-strengthen-finances\/","url_meta":{"origin":7404,"position":3},"title":"My &#8220;Jim Casey&#8221; take on the FHA&#8217;s Policy to Address Risk and Strengthen Finances","author":"Scott Schang","date":"January 22, 2010","format":false,"excerpt":"\"Before I knowed it, I was sayin' out loud, 'The hell with it! There ain't no sin and there ain't no virtue. There's just stuff people do. It's all part of the same thing.\" - (Preacher) Jim Casey \/ Grapes of Wrath Here's my take on the FHA 1\/20\/10 press\u2026","rel":"","context":"In &quot;Lending&quot;","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.californiateachersandemployeeshomeloanprograms.com\/wp-content\/uploads\/2010\/01\/Read-all-about-it.gif?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1875,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1875\/president-bush-unveils-fha-secure-program-today\/","url_meta":{"origin":7404,"position":4},"title":"President Bush Unveils &#8220;FHA-Secure&#8221; Program Today","author":"Lani Anglin","date":"August 31, 2007","format":false,"excerpt":"Today, President Bush Announced Steps At The Federal Level To Help Homeowners In Need Of Assistance Avoid Foreclosure. These steps will help homeowners having difficulty paying their mortgages and ensure that the problems now disrupting the housing industry do not happen again. The fundamentals of America's economy are strong \u2013\u2026","rel":"","context":"In &quot;Lending&quot;","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":12261,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/12261\/the-nar-backs-the-fha-watch-your-back\/","url_meta":{"origin":7404,"position":5},"title":"The NAR Backs the FHA&#8230; Who&#8217;s Backing You?","author":"Sean Purcell","date":"June 14, 2010","format":false,"excerpt":"Late last week the House of Representatives passed H.R. 5072, the so-called FHA Reform Bill.\u00a0 One of the major components of that bill (you can read the text of the bill here), raises the monthly insurance premium for all FHA buyers.\u00a0 What does that mean to your bottom line? \u00a0\u2026","rel":"","context":"In &quot;Lending&quot;","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/7404","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=7404"}],"version-history":[{"count":1,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/7404\/revisions"}],"predecessor-version":[{"id":7405,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/7404\/revisions\/7405"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=7404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=7404"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=7404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}