Archive for tag Fha
June 10, 2010 at 12:00 AM · Posted under Glenn Hanon
The Wall Street Journal reported on Monday that the FHA delinquency rate was slowing over the 2009 trend. They reported that only 8.5% of the loans in April were 90 days late vs. a high of 9.4% in January of this year. That is a lot like saying that last year our favorite sports team improving its record of losing 10 of the 11 games played vs. all 11 games lost the year before. The bottom line is the team still stinks. The housing market will continue to suffer due to a few fundamental factors.
First, low down payment loans are always risky. FHA has raised the threshold for the minimum credit score to obtain a FHA backed loan to 660 but buyers with stellar credit and little to no down payment will still walk away from the house IF they find themselves in difficult financial times, i.e. a job loss. The lenders of non FHA loans have tightened their standards and requirements for a loan much to the consternation of us in the Real Estate industry, but those buyers are less likely to default since they have lots of their own money into the home.
The second fundamental reason we have a troubled Real Estate economy, is that employers are still less likely to add to their ranks. Once job hiring becomes a routine event then this confidence will quickly move into the housing sector and we will see more than a glimpse of good news it will be here. But in this time of good news and bad news there is one thing we can do and that is to clearly look at the housing market with an unbiased view. Then and only then can we make really good decisions. For home owners who want to sell this is a good time. Yes you will sell your home for less than you thought, but you will also be buying for less too AND interest rates are so low that it seem silly not to make the move. We have seen an uptick in activity. Guess what? There is no tax credit. Savvy sellers know that they can sell their home now and buy a bigger or better home or for that matter downsize and do it all for less.
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Glenn Hanon
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February 02, 2010 at 12:01 PM · Posted under Glenn Hanon
Well it might not be there in time for many home owners who find themselves “underwater” in their mortgage. As a heads up the new HAMP program or Home Affordability Modification Program, that Washington put in place, has a few changes that were recently implemented. The goal is to streamline the process. Click Here for more information on the HAMP changes.
In other news, a report recently released indicates that FHA is in good shape. Some people critical of the FHA were concerned that they are taking a bigger risk in the mortgage business with their dramatic increase in market share. This story makes the point that their share has risen from a 3% market share to a 30% market share almost overnight. A personal note: FHA has played a role in the real estate recovery; however the low down payments are very concerning. Yes FHA requires a higher credit score, however even with good credit if one of the two persons who are buying the housing loses a job (a possibility in this economy) or their income is adjusted slightly, does FHA think those borrowers wont default? These are difficult times for everyone. The sooner we move towards responsible lending and borrowing the better our recovery will be. If the borrowers continue to live on the edge we could face another round of difficulties.
Posted by:Glenn Hanon
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November 04, 2009 at 10:21 PM · Posted under Glenn Hanon
In July of 2007 the news media was abuzz with the news that one of the largest mortgage lenders in the United States was set to go down in flames. That was then this is now. The Federal Housing Administration, FHA, began touting no down payment options when the private sector realized the nightmare that was on their doorstep. I remember commenting to my colleagues that the “No Down Payment” schemes were terrible but that the government’s insistence to continue this practice was not a good thing for our market. Some argued that this was a necessary program that offered an alternative to the potential pool of buyers who wanted to own a home but just needed that extra help. Today in the Wall Street Journal it was noted that 24% of the loans issued in 2007 are going bad and an additional 20% of the 2008 loans will go bad as well. Responsible lending must be the key to a recovery and not the quick fixes that we so often run to. The government pilloried the private banks for their shameful practices, but then did the same thing as the market was disintegrating with their own agency—the FHA.
FHA Digging Out
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