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Keyword: fha

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  • Freddie Mac sells off $305 million in seriously delinquent mortgages

    10/12/2015 7:22:01 AM PDT · by george76 · 17 replies
    Housing Wire ^ | October 9, 2015 | Ben Lane
    Completes seventh non-performing loan sale. Freddie Mac announced late Friday that it sold $305 million in seriously delinquent loans from its mortgage investment portfolio. The sale, which was initially announced last month, was completed via auction, with two pools containing 1,611 total loans being sold to a pair of buyers. According to Freddie Mac, these loans have been delinquent for approximately two years, on average. In its announcement, Freddie Mac said that given the deep delinquency status of the loans, the borrowers have likely been evaluated previously for or are already in various stages of loss mitigation, including modification or...
  • How The Government Caused The Mortgage Crisis [Overregulation vs Free Markets]

    06/04/2015 9:58:13 AM PDT · by Jan_Sobieski · 8 replies
    Business Insider ^ | 10/16/2009 | JOHN CARNEY
    It wasn't greed that caused the mortgage mess. In large part, the mess was the product of government policies designed to increase home ownership among the poor and ethnic minorities. Today Peter Wallison points out how Fannie Mae, Freddie Mac and the FHA created a demand for bad mortgages that encouraged mortgage brokers to generate millions of them. From the Wall Street Journal: Mortgage brokers had to be able to sell their mortgages to someone. They could only produce what those above them in the distribution chain wanted to buy. In other words, they could only respond to demand, not...
  • Obama Lawless Amnesty Costs Exposed (Weekly Update)

    12/06/2014 10:08:52 AM PST · by jazusamo · 13 replies
    Judicial Watch ^ | December 5, 2014 | Tom Fitton
    Obama Lawless Amnesty Costs Exposed – Congress AWOL? Exposed: Holder Uses Tax Dollars to Attack the Police Judicial Watch Fighting Against Disparate Impact Discrimination in Texas Obama Lawless Amnesty Costs Exposed – Congress AWOL? Despite all the budgetary pressure impacting vital programs of importance to the American people, the Obama administration apparently feels there’s still plenty of money to go around for illegal aliens. That’s what we learned back on September 9, 2014, when we obtained documents from the Department of Health and Human Services (HHS) that showed the Obama Administration paid Baptist Children and Family Services (BCFS) $182,129,786...
  • U of M study sees signs of mortgage redlining in Twin Cities

    04/11/2014 7:19:24 AM PDT · by TurboZamboni · 24 replies
    MPLS Star & SIckle ^ | 4-9-14 | JENNIFER BJORHUS
    Minority residents in the Twin Cities are much more likely than white people of similar incomes to be rejected for a mortgage, whether they’re buying a home or refinancing. If the home sits in a diverse or mainly nonwhite neighborhood, the application is also more likely to get the boot. Those are the findings of a new study from the University of Minnesota Law School suggesting that mortgage redlining remains alive and well in the Twin Cities. The report suggests that while banks may have justifiably tightened up credit standards, they have swung so far that they are cutting off...
  • Brown: FHA's Insurance Premiums Sidelining Buyers

    04/03/2014 12:35:47 PM PDT · by illiac · 5 replies
    RealtorMag ^ | 4/3/14 | RealtorMag
    The rising insurance rates on Federal Housing Administration mortgages are putting home purchases “increasingly out of reach” for many qualified buyers who rely on FHA financing, National Association of REALTORS® President Steve Brown wrote in a letter to FHA Commissioner Carol Galante. In the letter, Brown urged FHA to lower its annual mortgage insurance premiums. Brown acknowledged the significant losses that FHA’s Mutual Mortgage Insurance Fund faced during the housing crisis. FHA increased its premium structure as one way to reach a required 2 percent capital reserve ratio. But now that the agency is on the path to recovery, NAR...
  • FHA To Drop Loan Limits (Lowering The Brad Pitt Mortgage Limit), Hawaii Still The Highest

    12/08/2013 11:51:10 AM PST · by whitedog57 · 2 replies
    Confounded Interest ^ | 12/08/2013 | Anthony B. Sanders
    According to Nick Timiraos at the Wall Street Journal, Housing Agency (FHA) Will Reduce Mortgage-Loan Limits next month. The maximum for single-family homes in certain “high-cost” housing markets including Los Angeles, San Francisco and New York will fall to $625,500, from the current level of $729,750. This is an attempt to bring the FHA back in line with their original mission of supporting first time homebuyers, not the Brad Pitts of the world. Why does the Federal government insure mortgages in expensive cities that are far more costly than middle America? Ask your Congressman. Example. Honolulu leads the nation in...
  • Take A Giant Step: The New Fair Deal Banking And Housing Stability Act of 2013

    11/25/2013 12:48:07 PM PST · by whitedog57 · 1 replies
    Confounded Interest ^ | 11/25/2013 | Anthony B. Sanders
    There are a plethora of housing finance bills being written or circulating. These include the deeply flawed Corker-Warner bill, the Crapo-Johnson bill (that I have not seen), the PATH Act from the House. Now we have another House GSE reform bill, The New Fair Deal Banking And Housing Stability Act of 2013, from Representatives Justin Amash (sponsor), Jeff Duncan, Jim Jordan, Doug Lamborn, Tom McClintock, Mark Meadows, Tom Price and Matt Salmon. The New Fair Deal Banking and Housing Stability Act of 2013 takes decisive action to end the cycle of booms and busts, of bad behavior and bailouts: -...
  • No Country For Mortgage Lenders: JPMC And SunTrust Staggering Mortgage Settlements

    10/11/2013 8:05:09 AM PDT · by whitedog57 · 9 replies
    Confounded Interest ^ | 10/11/2013 | Anthony B. Sanders
    The climate for mortgage lenders is definitely taking a downward turn. Wells Fargo has released their Q313 Quarterly Supplement which revealed a shrinking mortgage pipeline. WFC Originations_0 (1) Of course, this is not surprising given a rise in mortgage rates starting May 1st (Q2) and declining real household income. rhoinmbrate But the humming dragon lingering in the background is the cost of litigation for originating and servicing mortgage loans. According to JPMorganChase’ Q3 earnings report, they paid a staggering $9.15 billion in pretax legal expenses. JPM Q3 1 addbacks_0 And then there is SunTrust which has been ordered to pay...
  • Take This Loan And Eat It: Banks May Have to Eat $57B of FHA Loans

    10/08/2013 8:43:53 AM PDT · by whitedog57 · 14 replies
    Confounded Interest ^ | 10/08/2013 | Anthony B. Sanders
    According to Kate Berry at American Banker, “The nation’s four largest banks are holding $57 billion of seriously delinquent loans that they’ve been slow to move into foreclosure over concerns that the Federal Housing Administration, the government mortgage insurer, will refuse to cover the losses and hit them with damages, according to industry sources.” The FHA insures home loans issued by banks and other mortgage lenders to low-income and first-time home buyers. Those buyers pay the FHA insurance premiums to cover potential losses. In the event that an FHA-backed loan goes into foreclosure, the lender has the right to file...
  • Levitan's Crony Capitalism Plea to Senate On Housing Reform (Wants Public-Private Hybrid Model)

    10/02/2013 11:01:44 AM PDT · by whitedog57 · 3 replies
    Confounded Interest ^ | 10/02/2013 | Anthony B. Sanders
    Georgetown law professor, Adam Levitan, testified in the US Senate yesterday on “Fundamentals of a Functioning Private Label Mortgage Backed Securities Market.” 172476171-Levitin-Senate-Banking-Testimony-10-1-13 Levitan was a student of Consumer Financial Protection Bureau architect and former Harvard law school professor Elizabeth Warren (now a US Senator). Levitan is a believer in BIG government and everything is the private sector’s fault. “Relying on PLS (Private Label Securities) to serve as the main financing source for the housing market would be a high-risk gamble with the US economy. Instead, a hybrid public-private system with first-loss private capital backstopped by an explicit and priced...
  • FHA's Galante Says $1.7 Billion Treasury Draw Doesn't Reflect State Of Insurance Fund

    09/27/2013 7:37:47 AM PDT · by whitedog57 · 2 replies
    Confounded Interest ^ | 09/27/2013 | Anthony B. Sanders
    It’s official. The FHA is crawling to Treasury for $1.7 billion. That is, more gruel. And the FHA blames senior citizens for their plight. Washington (AP) — A federal housing agency says it needs a $1.7 billion bailout from the Treasury to cover projected losses in a mortgage programs for seniors. At issue are reverse mortgage programs, which allow seniors to borrow against their homes for everyday living expenses. Carol Galante is Federal Housing Administration Commissioner. Galante wrote Congress Friday that her agency will withdraw the money from the Treasury before the fiscal year ends Monday. Congressional approval is not...
  • No Country For Young Men: Part-time Jobs, Renting, Obamacare, Massive Debt

    09/26/2013 12:47:26 PM PDT · by whitedog57 · 11 replies
    Confounded Interest ^ | 09/26/2013 | Anthony B. Sanders
    The Patient Protection and Affordable Care Act (aka, Obamacare) may be the worst piece of legislation ever passed by Congress and signed by a President .. and that covers a lot of ground. Why is it so bad? For one, do you REALLY want government in charge of your healthcare? Other than that, Obamacare distorts the healthcare market enormously. See the American Action Forum for an excellent analysis. And Obamacare varies quite a bit by state. Socialist Democrat states like New York, New Jersey, Vermont, Rhode Island and Taxachussets will have lower Obamacare premiums on average. All other states, hold...
  • FHA To Ask Treasury For More Gruel (FHA GAAP Net Worth At -$26.68 Billion)

    09/25/2013 5:08:42 PM PDT · by whitedog57 · 2 replies
    Confounded Interest ^ | 09/25/2013 | Anthony B. Sanders
    The Federal Housing Administration, weighed down by losses on souring loans, will likely need a cash infusion from the U.S. Treasury for the first time in its nearly 80-year history when the current budget year ends, according to sources familiar with the matter. The agency, which offers private mortgage lenders guarantees against homeowner default, has nearly exhausted its reserves for the mortgages it backs, making it necessary for the government agency to turn to the Treasury Department for a cash injection. The FHA has never needed to tap the Treasury before because it has been able to take other actions,...
  • It's Official: Affordable-Housing Zealots Hijack Mortgage Reform

    08/30/2013 5:04:45 PM PDT · by jazusamo · 17 replies
    Investots.com ^ | August 30, 2013 | Editorial
    Housing: Under pressure from civil-rights activists, federal bank regulators have killed tougher mortgage rules requiring minimum down payments and credit scores for loans bundled into securities. Here we go again. The Fed, FDIC, SEC and three other agencies regulating Wall Street have adopted the same weak underwriting standards the Consumer Financial Protection Bureau set earlier this year for loans. The Dodd-Frank Act was supposed to require banks and other issuers of mortgage-backed securities to retain 5% of the credit risk of the bonds on their books to avoid the moral hazard that led to the financial crisis, when lenders quickly...
  • AG Holder Subpoenas Mortgage Documents For Years Before Crisis (Here Is What He Will Find)

    08/29/2013 3:32:27 PM PDT · by whitedog57 · 8 replies
    Confounded Interest ^ | 08/29/2013 | Anthony B. Sanders
    The U.S. Justice Department has subpoenaed documents from what was Wall Street’s largest mortgage due-diligence firm as it ratchets up an investigation into bank actions in the years before the financial crisis. The Justice Department delivered a subpoena to Clayton Holdings LLC last month for an extensive number of documents related to the firm’s work on residential mortgage-backed securities deals. Information sought includes due diligence reports, internal communications related to reviews of pools of loans and correspondence with clients, according to a copy of the subpoena filed as an exhibit in federal court. Let’s take the case of the FHA....
  • Healing? Q2 Real GDP Revised Upwards to 2.5%, Home Foreclosures Dropping, FHA Improving

    08/29/2013 8:02:11 AM PDT · by whitedog57 · 2 replies
    Confounded Interest ^ | 08/29/2013 | Anthony B. Sanders
    Is the economy finally healing? It has been over 4 years since the alleged end of the recession. Foreclosures are improving, mortgage rates came down a bit and Q2 GDP was revised upwards to 2.5% from 2.2%. today The Freddie Mac Loan Commitment rate for 30 year fixed actually fell a bit. This is not surprising giving the recent trends in the Treasury 10 year yield. Still, the 10 year Treasury yield is up 115 basis points since May 1st. freddke30us10 FHA Serious Delinquencies and Foreclosures are down to 7.57% as of June 2013, a noticeable decline from 9% at...
  • Dueling Housing Reform Bills: The House’s PATH Bill Versus The Senate’s Corker-Warner Bill

    08/14/2013 11:29:06 AM PDT · by whitedog57
    Confounded Interest ^ | 08/14/2013 | Anthony B. Sanders
    House Financial Services Committee Chairman Jeb Hensarling spoke yesterday in Texas on housing reform. Hensarling pointed out that the Protecting American Taxpayers and Homeowners (PATH) Act specifically: * Ends the costly Fannie and Freddie bailout; * Protects and restores the FHA by defining its mission; * Increases mortgage competition, enhances transparency, and maximizes consumer choice; and * Breaks down barriers for private investment capital. Here is a markup of the PATH bill. The PATH bill is superior to the Senate’s Corker-Warner bill that proposes winding down Fannie Mae and Freddie Mac, but creates yet another government insurance corporate (The Federal...
  • FHA: Take This Loan And Shove It (Harry Reid Objects To Closing Down Fannie and Freddie)

    08/13/2013 10:39:05 AM PDT · by whitedog57 · 1 replies
    Confounded Interest ^ | 08/13/2013 | Anthony B. Sanders
    According to Kate Berry of American Banker, the cost of doing business with the Federal Housing Administration could skyrocket if the agency adopts a new method for calculating lenders’ liability for poorly underwritten loans that default. The method under consideration would have the FHA examine a random sampling of each lender’s loans, calculate the percentage of loans in the sample with underwriting defects, and then extrapolate that rate to the lender’s FHA portfolio. Lenders would then have to compensate FHA for the “estimated total risk” to the agency’s insurance fund. “If this goes through, it means it will be a...
  • UK Adopts "Help To Buy" Scheme: The Return of 100% LTV Lending

    07/28/2013 2:43:34 PM PDT · by whitedog57 · 10 replies
    Confounded Interest ^ | 07/28/2013 | Anthony B. Sanders
    Like the USA, the UK can’t leave well enough alone and is trying to reinflate their housing market through a program called “Help to own.“ At least the UK government calls it by it’s rightful name: a “scheme.” Here is how it works. * Help to Buy equity loans are open to both first-time buyers and home movers on new-build homes worth up to £600,000. * you’ll need to contribute at least 5% of the property price as a deposit * the government will give you a loan for up to 20% of the price That would be 100% Cumulative...
  • Jumbo-Conforming Mortgage Spreads Shrink (Jumbo ARM Spread Goes NEGATIVE!)

    07/01/2013 12:56:22 PM PDT · by whitedog57 · 1 replies
    Confounded Interest ^ | 07/01/2013 | Anthony B. Sanders
    Rising mortgage rates, rising home prices. What is happening to the jumbo-conforming loan spread? In the fixed-rate market, the jumbo mortgage rate remains higher than the conforming mortgage rate. But the spread between the two has shrunk for the first time to early 2007 (and before) levels. jumboconfrs The jumbo-conforming spread actually began to increase in late 2007 and peaked in January 2009 at 184 basis points. It is now 28 basis points, below the average from 2000 to July 2007 of 29.5 basis points. jumboconformigspread On adjustable-rate mortgages (ARMs), the spread between jumbo ARMs and conforming ARMs is actually...
  • FHA Swamped By Defaults; Congressional Report Shows FHA Could Suffer Losses as High as $115 Billion

    06/30/2013 8:55:37 AM PDT · by Kaslin · 8 replies
    Townhall.com ^ | June 30, 2013 | Mike Shedlock
    An alleged "worst case scenario" shows the FHA could lose as much as $115 Billion. Since these worst case scenarios are always famously optimistic, the best course of action would be to shut the agency down. I was quoted as saying just that by the Heartland in Congressional Report Raises Spectre of FHA Bailout. The Federal Housing Administration's (FHA) losses over the next 30 years could be much higher than originally projected, according to the findings of a congressional committee. The dismal forecast has some bracing for another taxpayer-financed bailout. The House Oversight and Government Reform Committee, chaired by Rep....
  • Yet Another Obama Cover-Up: FHA Bailout Fear

    06/08/2013 4:55:25 PM PDT · by blueyon · 15 replies
    Investors.com ^ | 6/07/13 | IBD Editorials
    Subprime: For years, the administration has denied FHA troubles. But emails reveal it not only knew of them, but also withheld evidence of projected insolvency from Congress. Under Obama, the Federal Housing Administration has increasingly backed new home loans to so-called rebound borrowers who recently defaulted on past mortgages. The agency is letting lower-income borrowers get loans just three years after foreclosure with as little as 3% down and subprime-low credit scores. In fact, 40% of newer FHA-backed loans are subprime. The risky lending has led to higher delinquencies. Now at 17%, delinquencies on FHA loans are so high the...
  • Growth in Non-fixed Rate Notes — Implications for Mortgage Markets? (ARMs vs FRMs)

    06/06/2013 5:50:02 PM PDT · by whitedog57 · 1 replies
    Confounded Interest ^ | 06/06/2013 | Anthony B. Sanders
    According to Bloomberg Briefs, there has been a jump in non-fixed rate notes. And this occurs whenever Treasury yields rise. But if we look at The Fed, Fannie Mae and Freddie Mac, they are currently invested primarily in fixed-rate products. The ARM (adjustable rate mortgage) share of mortgage applications has risen to 6.4% in recent months, but is well below historic highs. As we argued in a Mercatus research paper, “Do We Need the 30 Year Fixed-rate Mortgage?“, Mike Lea and I say no. In fact, ARMs have decided advantages over their fixed-rate cousin such as risk-sharing with the lender...
  • FHA Losses Could Reach $115 Billion (Stress Test) In Extreme Scenario

    06/04/2013 5:16:30 PM PDT · by whitedog57
    Confounded Interest ^ | 06/04/2013 | Anthony B. Sanders
    Nick Timiraos at the Wall Street Journal wrote that the FHA could suffer losses up to $115 billion over the next 30 years. In its annual audit, the FHA disclosed that under current conditions, its projected losses over 30 years would exceed its reserves by $13.5 billion. A more recent analysis, released in April by the White House’s budget office, showed the agency would require $943 million this year due to losses in its reverse-mortgage program, which allows homeowners who are 62 years or older to take cash out of their homes. (Yes, the reverse-mortgage program that I argued was...
  • Grumpy Ben: Increasing Risk For Ginnie Mae Investors (Fed) – Rising Rates, Spreads And Duration

    06/03/2013 6:47:34 PM PDT · by whitedog57
    Confounded Interest ^ | 06/03/2013 | Anthony B. Sanders
    May has been a difficult month for Ginnie Mae mortgage-backed securities investors (like The Fed). First, the US sovereign yield curve has increased since May 2nd. The spread between the Ginnie Current Coupon and the Bankrate 30 year FHA rate has risen from around 61 basis points to under 100 basis points. The Ginnie MBS 4.0% duration has been rising rapidly with the increase in the yield curve. See here for a definition of duration. The convexity of Ginnie 4.0s has increased as well. The good news for the FHA and Ginnie Mae is the rise in house prices over...
  • More Justice Department Chicanery: Thomas Perez and ‘Disparate Impact’

    06/01/2013 10:03:06 AM PDT · by jazusamo · 7 replies
    PJ Media ^ | June 1, 2013 | Hans von Spakovsky
    The cabinet nominee fought to keep the Supreme Court from reviewing his preferred extortion technique. One of the administration’s favorite legal theories, “disparate impact,” may get taken up again by the Supreme Court. Will the administration try to engineer some kind of payoff to take the issue away from the Court — again? In June 2012, the town of Mount Holly, N.J., petitioned the Supreme Court to review the legitimacy of racial discrimination claims premised solely on a disparate impact theory under the Fair Housing Act. Under this theory, a policy — such as requiring high credit scores for loans...
  • Bankers Club: TBTF Wells Fargo Biggest Partner Of Fannie, Freddie and FHA

    04/16/2013 10:46:18 AM PDT · by whitedog57
    Confounded Interest ^ | 04/16/2013 | Anthony B. Sanders
    HUD Secretary Shaun Donovan said Congress and the Administration “should move forward this year with plans for overhauling the U.S. mortgage finance system,” including GSEs Fannie Mae and Freddie Mac, which were “seized by the government in 2008.” Donovan is quoted as saying, “Reform of the failed model of the GSEs, the private gains and socialized losses model, is a top priority and it’s critical that we make progress this year toward that goal.” There have been rumblings of GSE “reform” for the past several years. But the stock answer has been “But not now.” Fannie Mae’s record profits for...
  • Landing A Reverse Mortgage Just Got Tougher

    04/14/2013 10:37:05 AM PDT · by blam · 5 replies
    TBI - CNBC ^ | 4-14-2013 | Mark Koba
    Landing A Reverse Mortgage Just Got Tougher Mark Koba, CNBCApr. 14, 2013, 9:20 AMSeniors looking for a big cash payout from a reverse mortgage will have to look elsewhere for needed funds. A small but increasing number of defaults on the loan product has prompted a crackdown by the Federal Housing Administration (FHA) on the biggest payout loan to homeowners. The basic theory behind reverse mortgages — you must be 62 or older to apply — is that instead of making payments to a lender like in a traditional mortgage, the borrower receives non-taxable money from the lender, which does...
  • FHA loans get pricier April 1

    03/29/2013 9:20:49 AM PDT · by illiac · 5 replies
    Bankrate.com ^ | 3/26/13 | Polyana Da Costa
    The Federal Housing Administration will charge borrowers higher mortgage insurance premiums on new FHA loans starting next week. If you are planning on getting an FHA loan in coming days, make sure your lender gets a case number from the FHA before Monday to avoid the higher fee. Lenders normally can get the case number assigned to the loan once the borrower applies for the mortgage. But if they are overwhelmed with applications, they may not get to it in time, says Cameron Findlay, director at Discover Home Loans. The annual fee on most FHA loans will increase by 0.1...
  • Investor-fueled Housing Recovery: Home Prices Rise 0.1%% In January NSA

    03/26/2013 6:57:07 AM PDT · by whitedog57 · 9 replies
    Confounded Interest ^ | 03/26/2013 | Anthony B. Sanders
    The economy is improving (at long last). Durable goods order surprised to the upside with a print of 5.7% SA. But the YoY NSA durable goods orders seems to be in a decline. And the housing market continues to exhibit price increases. The S&P Case-Shiller house price index rose 1.02% in January on a seasonally adjusted basis (SA). On a non seasonally adjusted basis, house prices rose only 0.1%. When we remove the seasonal adjustment, house prices nationally seem to be flat since the end of 2008 with some undulations. The big winners in January? The sand states where investors...
  • Dueling Banjos: Mortgage Applications Fall, HARP Refis Increase, Fannie Back In 3% Down Market

    03/13/2013 9:04:48 AM PDT · by whitedog57 · 2 replies
    Confounded Interest ^ | 03/13/2013 | Anthony B. Sanders
    The Mortgage Bankers Association (MBA) released their application indices this morning. In a nutshell, mortgage applications fell -4.68% from the previous week. Purchase applications fell -2.53% and are at 1997 levels as the big push for homeownership from the Clinton Administration was starting. Refinancing applications fell -5.21%. They rose the previous week as mortgage rates started rising, but have cooled off this week. In fact, you can see a trend of decline in refi applications from last September. Mortgage rates have been trending up since October of last year. In refi news, the FHFA released a report showing that Home...
  • Where Have All The Spreads Gone? – Mortgage Spreads Remain HIGH After October 2008

    03/12/2013 2:05:45 PM PDT · by whitedog57 · 1 replies
    Confounded Interest ^ | 03/12/2013 | Anthony B. Sanders
    One of my favorite mortgage spreads to look at is the spread between retail mortgage rates (such as the Bankrate 30 year average fixed-rate) and the government agency/enterprise current coupon rates. Prior to November 2008, the spread between the retail mortgage rate and the Ginnie Mae current coupon rate was 22.60 basis points (median). But after October 2008, the median spread skyrocketed to 107.31 basis points. While the spreads vary over time, that is almost an 85 basis point increase in the spread. AND the correlation is falling. Why is this curious? Because the same thing happened to Fannie Mae...
  • Liquidity Trap: Treasury and Mortgage Rates Rise While Money Velocity Plummets

    03/11/2013 3:03:10 PM PDT · by whitedog57 · 11 replies
    Confounded Interest ^ | 03/11/2013 | Anthony B. Sanders
    I was just interviewed by WMAL radio in Washington DC on real estate and mortgage rates. Of course, I was asked what is happening to mortgage rates. I mentioned that the US economy is in a liquidity trap (where injections of cash into the private banking system by a central bank fail to lower interest rates and hence fail to stimulate economic growth). In fact, interest rates have been rising over the past several months. Since last November, the 10 year Treasury yield has risen. The yield curve has risen since November. And mortgage rates have risen as well. The...
  • Mortgage Burden Grows, but Federal Role Is Shrinking

    02/13/2013 8:40:41 AM PST · by Lorianne · 3 replies
    Wall Street Journal ^ | 13 February 2013 | Nick Timiraos
    The Federal Housing Administration has played a major role supporting housing markets through the downturn, but there are signs that the agency is beginning to cede market share back to the private sector. Data from CoreLogic underscores the first point. In the aftermath of the housing bust, private lenders have required down payments of 20%, while loans to the most creditworthy borrowers can have down payments of 10% if borrowers purchase mortgage insurance. For borrowers with less money to put down, government insurance programs are the best bet. The FHA, for example, allows borrowers to make down payments of just...
  • Jefferson, The FHA and Harming Borrowers: The Case For Tightening FHA Standards

    02/05/2013 11:00:41 AM PST · by whitedog57 · 4 replies
    Confounded Interest ^ | 02/05/2013 | Anthony B. Sanders
    The following fhatestimony3 is my testimony to the House Financial Services committee on Wednesday at 9am. I. Introduction Chairman Hensarling and distinguished members of the committee, thank you for the invitation to testify at today’s hearing on “Examining the Proper Role of the Federal Housing Administration in our Mortgage Insurance Market” and to provide my perspective on the ongoing mortgage debacle, the resulting decline in the private mortgage insurance market and the need to return the FHA’s share of the insurance market back to pre-bubble levels. I am Anthony B. Sanders, Senior Scholar at George Mason University. The Federal Housing...
  • Mortgage Spreads RISE After Federal Takeover of Mortgage Markets (thanks a heap!)

    01/13/2013 10:41:36 AM PST · by whitedog57 · 3 replies
    Confounded Interest ^ | 01/13/2013 | Anthony B. Sanders
    What is your prediction on mortgage spreads after the private sector almost vanished by 2008? The red line denotes non-GSE market share and the green line denotes GSE market share (e.g., Fannie Mae, Freddie Mac, etc.). The government essentially became a monopolist (although the government entities including the FHA compete with each other for market share). There are barriers to entry that would promote competition with Uncle Sam – it is called Dodd-Frank and the Consumer Financial Bureau. The vast majority of residential mortgages will continue to be purchase and/or insured by the Federal government. But after the effective nationalization...
  • Study Shows a Pattern of Risky Loans by F.H.A.

    12/16/2012 9:05:54 PM PST · by Lorianne · 3 replies
    New York Times ^ | 12 December 2012 | Gretchen Morgenson
    A new and extensive analysis of 2.4 million loans insured by the Federal Housing Administration in recent years shows a pattern of risky lending that could generate $20 billion in losses and harm thousands of the nation’s most vulnerable borrowers. By ignoring risks in loans it insured in 2009 and 2010, the study concludes, the F.H.A. is imperiling both borrowers and taxpayers who stand behind the agency. The analysis emerged less than a month after the F.H.A.’s auditor submitted a troubling report on the financial soundness of its insurance fund. In mid-November, the auditor estimated that the fund, which backs...
  • President Obama Eyes Banks To Cover Bad FHA Bets

    12/10/2012 6:05:23 PM PST · by Nachum · 9 replies
    IBD ^ | 12/ | Editorial
    Subprime Scandal: Now that the president's mismanagement of FHA has led to its insolvency, how will he avoid the embarrassment of a bailout? By squeezing banks, how else? Under Obama, the Federal Housing Administration has increasingly backed new home loans to so-called rebound borrowers who recently defaulted on past mortgages. The agency is allowing lower-income borrowers to get loans just three years after foreclosure with as little as 3% down and lousy credit scores. In fact, a whopping 40% of newer FHA-backed loans are subprime. The risky lending has led to higher delinquencies. In fact, at 17%, delinquencies on FHA...
  • The Latest Taxpayer Housing Bust. With the election over, we now learn that the FHA is insolvent.

    11/20/2012 6:56:32 AM PST · by SeekAndFind · 11 replies
    Wall Street Journal ^ | 11/20/2012 | The editors
    Vindication is overrated, especially in a losing cause, so it brings no satisfaction to have predicted that the Federal Housing Administration would sooner or later threaten taxpayers. That day has arrived. Safely past the election, the feds announced Friday that the FHA's liabilities exceed its assets by at least $16.3 billion—and the gap could reach $93.7 billion in the worst case. Yet it's worth recalling that when we warned about FHA's troubles in September 2009, we got an accounting lecture from HUD Secretary Shaun Donovan and a letter from FHA Commissioner at the time, David Stevens, that we were "just...
  • FHA Nears Need for Taxpayer Funds (More Bailouts!)

    11/15/2012 3:22:32 PM PST · by mojito · 6 replies
    WSJ ^ | 11/15/2012 | Nick Timiraos
    The Federal Housing Administration is expected to report this week it could exhaust its reserves because of rising mortgage delinquencies, according to people familiar with the agency's finances, a development that could result in the agency needing to draw on taxpayer funding for the first time in its 78-year history. Such a report would likely set off a political fight over the government's role in housing, as it raises the prospect of billions of dollars being added to the U.S. government's effort to stabilize the hard-hit sector in the aftermath of the 2008 financial crisis, which already includes $137 billion...
  • The FHA is Blowing Up: Bad News for the Housing Market

    11/15/2012 11:18:09 AM PST · by RobertClark · 18 replies
    libertyblitzkrieg.com ^ | 11/15/2012 | Michael Krieger
    A very important article came out from the Wall Street Journal yesterday titled “FHA Nears Need for Taxpayer Funds,” and it outlines the serious financial problems facing the Federal Housing Administration. For those that are unaware or need a refresher, the FHA has been the key element to the phony “housing recovery” the government has been trying to create. In the wake of the collapse of 2008, Fannie Mae and Freddie Mac blew up and what was left to pick up the pieces was the FHA. No private player would issue loans with down payments of 3%, but this was...
  • FHA Needs Bailout; Getting A Mortgage Gets Harder

    11/14/2012 11:40:50 PM PST · by ExxonPatrolUs · 5 replies
    Forbes ^ | 11/14/2012 | Halah Touryalai
    The Federal Housing Administration is so loaded with delinquent mortgages that its reserves are running low, according to a report from The Wall Street Journal. The Journal, whose Nick Timiraos cites people familiar with the matter, notes that 9.6% of the FHA’s $1.08 trillion mortgage guarantees are more than 90 days past due or in foreclosure. (Snip) The good news for the FHA is that it won’t have to go to great lengths to get access to bailout funds. Enter the U.S. Treasury. Because the FHA operates on a so-called ‘permanent and indefinite’ budget it won’t need to ask Congress...
  • Obama’s November Surprise : The Federal Housing Administration is running out of money

    10/04/2012 5:26:53 AM PDT · by SeekAndFind · 4 replies
    National Review ^ | 10/04/2012 | Dam Murphy
    With the presidential race entering the homestretch, most of the political world is wondering: Will there be an “October surprise”? But this year the real surprise may come in November, when the American people learn about the need for a taxpayer-funded bailout of the Federal Housing Administration (FHA). The FHA guarantees mortgages on loans made by FHA-approved lenders throughout the United States and insures mortgages on single-family homes. Traditionally, it has participated in a fairly small segment of the overall mortgage market. In 2006, the FHA’s market share was just 5 percent. But as credit availability tightened and underwriting standards...
  • FHA Short-Sale Program may have Cost HUD $1 Billion in False Claims (Most Ethical Gov't Ever! alert)

    09/20/2012 3:11:52 PM PDT · by RKBA Democrat · 8 replies
    Mortgage News Daily ^ | 9-20-12 | Jann Swanson
    Misuse of the FHA Preforeclosure Sale Program may have cost the Department of Housing and Urban Development (HUD) over a billion dollars for claims that did not meet program according to an audit released this week by the HUD's Region 7 Office of Inspector General (OIG). OIG initiated the audit after noticing significant deficiencies in borrower qualifications during an audit of program claims at one large lender. The Preforeclosure Sale Program allows borrowers in default due to an adverse an unavoidable financial situation to sell their home at fair market value and use the proceeds to pay off an FHA-guaranteed...
  • Is the Government Backing a New Housing Bubble?[FHA underwrites loans quadrup rate of 3yrs ago]

    05/14/2012 8:54:28 AM PDT · by fight_truth_decay · 11 replies
    Fiscal Times ^ | May 14, 2012 | DAVID FRANCIS
    ight now, the U.S. Federal Housing Authority is offering historically low interest rates on home loans as part of an effort to kick-start the housing market. Under a plan introduced by President Barack Obama, an FHA-qualifying U.S. homebuyer can apply for a 30-year mortgage with a fixed interest rate of 3.75 percent and a 15-year fixed mortgage at 3 percent. FHA loans require as little as 3.5 percent of the home’s value up front in the form of a down payment. SNIPAccording to Edward Pinto, a resident fellow at the conservative American Enterprise Institute, FHA loans are allowing a repeat...

    04/28/2012 2:12:19 PM PDT · by Jerome Hudson · 9 replies
    big Government ^ | 04/28/2012 | wynton Hall
    The U.S. Federal Reserve estimates that of the 12 million American homeowners who have negative equity, 3 million--or 1 out of every 4--are borrowers with FHA-insured loans.
  • FHFA’s DeMarco: Several Weeks Before a Decision on Principal Reductions (Jurassic Park Alert!)

    04/11/2012 11:06:53 AM PDT · by whitedog57
    Confounded Interest ^ | 04/11/2012 | Anthony B. Sanders
    Today, FHFA updated their study of principal reductions and Director Ed DeMarco presented the new results. He did NOT announce any trial program or agreement with the Obama Administration about using Fannie Mae and Freddie Mac to salvage the housing market. But he did say that an announcement will be out in a few weeks. As I said at Brookings, we have very little empirical evidence (other than anecdotal stories) that principal reductions work. We have not been through 3-4 years of mortgage modifications with principal reductions to see if they are as effective as forbearance in preventing defaults. FHFA...
  • Housing Market Losses At $7.66 Trillion, But Still Less Than Obamacare Funding Hole at $17 Trillion

    03/31/2012 7:38:27 AM PDT · by whitedog57 · 2 replies
    Confounded Interest ^ | -03/31/2012 | Anthony B. Sanders
    Newsy had a nice summary of the principal reduction debate. It focuses on California Attorney General Kamala Harris requesting that mortgage giants Fannie Mae and Freddie Mac cease foreclosures (at least in California) and perform principal reductions. FHFA Acting Director Edward DeMarco is resistant to the idea saying the principal reductions would cost taxpayers $100 billion. “Only” $100 billion? A recent Fed study covered in HousingWire found that negative equity in the U.S. is approaching $4 trillion. $100 billion is a big number, but pales in comparison to the cost of wiping out all negative equity. So, the tab to...
  • FHA's Capital, Personal Income, Spending and Savings: All Aboard the Debt Train!

    03/30/2012 7:36:53 AM PDT · by whitedog57 · 1 replies
    Confounded Interest ^ | 03/30/2012 | Anthony B. Sanders
    The Bureau of Economic Analysis (BEA) released the Personal Income and Outlays report for February. The Good: Personal income increased $28.2 billion, or 0.2 percent in February and Personal consumption expenditures (PCE) increased $86.0 billion, or 0.8 percent (mostly consumer durables like autos and computers). Real Personal Consumption Expenditures (PCE) increased 0.5 percent in February, compared with an increase of 0.2 percent in January. Personal income rose 0.2% in February. The Bad: REAL personal income fell 0.1% in February. So, personal spending increased 0.5% while personal income FELL 0.1%. That means that households … are boarding the Debt Train again!...
  • Government selling of blocks of foreclosed homes

    02/02/2012 8:12:24 PM PST · by tbw2 · 17 replies
    02/02/12 | vanity
    I have heard that the government has started selling lots of foreclosed homes to government approved real estate management firms or property liquidators. 1. Where is more information on this process? 2. Who is getting to bid on lots of homes, how do we find out who is awarded the properties? 3. What are the long term ramifications of this?