FHA Home Mortgage Insurance Claims Skyrocket
According to government data released thios week, Claims on Federal Housing Administration mortgage insurance rose by 61 percent last year, compared to what it was five years ago. These pay offs allowed more than six in 10 home owners who defaulted on FHA-insured loans to stay in their homes, up from three in 10 in 2000.
For every FHA-backed loan that goes into foreclosure, the agency's insurance fund pays $98,740 on average to mortgage servicers. In contrast, it gave incentives of $136 to $7,169 to lenders willing to modify loan terms.
The FHA says its workouts are a cost-effective solution in keeping with its social mission, preventing losses of up to $2 billion a year if the homes are foreclosed upon, and saving whole neighborhoods.
Republicans, who are generally opposed to these kinds of bailouts, say the FHA has pushed mortgage servicers to make loan modifications that are unlikely to work, and that the system is open to cheating by borrowers who deliberately withhold payments.
"Markets go up, they go down, and the government should not be involved in determining which way they go," said Rep. Randy Neugebauer (R-Texas) during a House Financial Services Committee meeting.
downtown San Diego condominium sales
The good news is, once the dust settles, the new and improved mortgage payments will be a piece of cake!
Erica
San Diego County Law
It’s simple. House prices have to come down to pre-bubble level. It’s hard to take for a lot of folks. But that’s reality.
Karry
San Diego County Lasik Surgery
Houses will only fall 30% if everyone rushes for the exits. 5 years ago many markets were underpriced and it’s highly unlikely they’ll go back to that level. There’s still a lot of demand for housing and THERE ALWAYS WILL BE! Anyone predicting a 40% decline is making a prediction because he earns money by making predictions!
Shawn
San Diego County Plastic Surgery
The downturn during the 1970s was caused primarily by Richard Nixon’s faulty economic policy. Among other things the imposition of widespread wage and price controls caused the extended recession of the 1970s we refer to today as stagflation. Oil prices played a role but it was the governments response that truly put the United States over the edge. Unless the Government takes draconian measures like Nixon did to insulate the economy it doesn’t make sense to compare today’s situation to that of the 1970s.
Rebecca
San Diego Plastic Surgery
The goverment should take draconian measures like a creating a repo market to hide bank losses ? Or maybe draconian measures like bailing out home speculators because they might incur a loss?
Stephanie
San Diego Clinical Research