Selling hope, delivering harm 

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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