As I have previously posted, the FHA (Federal Housing Administration) is making loans that are rapidly going bad.
Here are some more details and snarky commentary from my favorite bunny cannon shooting blogger, Fund my Mutual Fund: 10/14/09 NYT: FHA Problems Raising Concern of Policy Makers
TraderMark provides some additional detail and of course colorful description of the current political and economic situation regading falling home prices and the government's attempt to prop them up.
The graphic at right shows rising default rates for FHA loans made recently as compared to a couple of years ago. Please read the article, but here's a few juicy bits.
Let's stop right there. 1 in 5 loans made in 2008 via FHA are ALREADY IN TROUBLE. 1 in 4 loans made in 2007 via FHA are ALREADY IN TROUBLE. We are not even 3 years into these mortgages. This is EXACTLY the same data we were presenting in 2007 about subprime loans! And Alt A's! And Option ARMs!
The number of F.H.A. mortgage holders in default is 410,916, up 76 percent from a year ago, when 232,864 were in default, according to agency data.
It's some good stuff...
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