p Nightmare at FHA - January 2012

Selling hope, delivering harm 

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January 2012




The month’s features:

Spotlight on insolvency

The FHA Is Estimated to Have a Current Net Worth of –$17 Billion and an Estimated Capital Shortfall of $35–53 Billion

Spotlight on delinquency

Total Delinquency Rate in December Hit 17.79 Percent

Spotlight on delinquency hot spots

Georgia and New Jersey Top the List of Ten States with the Highest FHA Total Delinquency Rates

Spotlight on the impact of unsustainable lending practices on families and neighborhoods

About 25 Percent of FHA’s Recently Insured Loans Have Layered-Risks Resulting in a 15 Percent or Higher Expected Claim Rate

Spotlight on FHA reform

Future issues of FHA Watch will look at reforming FHA programmatically according to the following principles:
1.    Step back from markets that can be served by the private sector.
2.    Stop knowingly lending to people who cannot afford to repay their loans.
3.    Help homeowners establish meaningful equity in their homes.
4.    Concentrate on homebuyers who truly need help purchasing their first home.

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