Some analysts pointed out that borrowers with FHA-secured loans now have an average credit score of 690, compared to 630 two years ago. In spite of this, a large number of borrowers are turning up late in their payments or even defaulting. Delinquent FHA loans, those 90 days or more late, jumped 62.1% in the past year to 558,944, or 9.4% of FHA loans, as of the end of January, according to agency statistics. The FHA, however, insists its finances are sound. Its loan portfolio actually performed better than most mortgage products, according to David Stevens, the agency’s commissioner.
FHA loans are still a better option for lower income individuals to purchase a home that they would not otherwise be able to afford. However, if the number of delinquencies increases with such a pace, it is possible that taxpayers will eventually have to bail out the agency. My question here is: How can the Federal Housing Administration work out a suitable strategy to reduce defaults and late payments, and maintain healthy equity/collateral ratios against lent money at the same time?
Original Blog Link:
http://blog.mfgmortgagerates.com/?p=72
There's really nothing they can do at this point IMO to fix this... It's not because of anything they have done. As you said, the average FICO is much higher now. It's just a product of the times, most of the economy over the last two years... And the fact that MANY people continue to be laid off. If you lose your job and can't find another (which is the situation for MANY) there's not a lot you can do about making that mortgage payment unless you have an emergency fund which most Americans fail to do.
Nice information, thanks for sharing it.
but can you tell me something more about the FICO.
Thanks.
Apart from this valuable loan, the importance of FHA loab is still at its best.
Regards,
Intuitive Mind
Oh I see but what could be the proper definition to consider FICO ?
Thanks.
(05-07-2010 10:07 PM)d.wolowitz Wrote: [ -> ]Some analysts pointed out that borrowers with FHA-secured loans now have an average credit score of 690, compared to 630 two years ago. In spite of this, a large number of borrowers are turning up late in their payments or even defaulting. Delinquent FHA loans, those 90 days or more late, jumped 62.1% in the past year to 558,944, or 9.4% of FHA loans, as of the end of January, according to agency statistics. The FHA, however, insists its finances are sound. Its loan portfolio actually performed better than most mortgage products, according to David Stevens, the agency’s commissioner.
FHA loans are still a better option for lower income individuals to purchase a home that they would not otherwise be able to afford. However, if the number of delinquencies increases with such a pace, it is possible that taxpayers will eventually have to bail out the agency. My question here is: How can the Federal Housing Administration work out a suitable strategy to reduce defaults and late payments, and maintain healthy equity/collateral ratios against lent money at the same time?
Original Blog Link: http://blog.mfgmortgagerates.com/?p=72
I'm not sure much can be done or needs to be done. It's a sign of the times. Companies have been laying off workers from all socio-economic classes over the past three years.
FHA has always had as its goal to increase home ownership by making
FHA loans available to those with less than perfect credit. They insure mortgages that banks would otherwise deny, taking away the risk for the lender.
I would much rather have to bail out the FHA which is actually out their trying to help people get loans who could not otherwise afford them than to bail out big companies like Countrywide who made billions off of putting people in ARMs that they knew they would not be able to afford when the rates went up or approving loans on homes that really should never have appraised.
(07-21-2010 11:59 PM)hardik soni Wrote: [ -> ]Oh I see but what could be the proper definition to consider FICO ?
Thanks.
FICO Score:
http://en.wikipedia.org/wiki/FICO_score#...and_others