p Nightmare at FHA - April 2012

Selling hope, delivering harm 

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April 2012



This Issue’s Highlight

Spotlight on the government mortgage complex’s market share: New research indicates the Ginnie/FHA, Ginnie/VA, and Ginnie/USDA divisions’ combined market share of owner-occupied home purchase loans increased to a record level in 2011, notwithstanding efforts to shrink the government’s role to allow more room for private capital. As policymakers continue their efforts to reduce the government’s role in the currently nationalized housing market, the broadly available and deep subsidies provided to the five divisions of the Government Mortgage Complex continue to distort the marketplace and thwart these efforts.

The month’s features:

Spotlight on insolvency
FHA Is Estimated to Have a Current Net Worth of –$12.05 Billion and an Estimated Capital Shortfall of $31–50 Billion

Spotlight on delinquency
Total Delinquency Rate in March Declines to 15.78 Percent; Serious Delinquency Rate Eases to 9.47 Percent

Spotlight on Best Price Execution
Ginnie/VA Division Takes or Ties for the Top Spot on All Ten Best Price Execution Loan Scenarios

Spotlight on the government mortgage complex’s market share
Government Mortgage Complex Share of Outstanding Single-Family First Mortgages Is Rising

Spotlight on the road to FHA program reform
Principles to Guide FHA Reform to Achieve Sustainable Homeownership Consistent with the FHA’s Low- and Moderate-Income Mission

Spotlight on the road to FHA fiscal reform
Policy Changes Needed to Implement Fiscal Reform Principle 3

The road map to FHA reform
Specific Steps to Reform and the Status of Each

Home FHA Watch April 2012