Mounting losses pile up at FHA

The WSJ published this article which looks into the rising delinquency of FHA insured loans across the US.  As an industry insider this news is not entirely surprising.

During the peak of the housing boom subprime mortgages and ALT-A mortgages were more attractive for those applicants who were looking for low down payment programs.

Since those programs have been eliminated from the marketplace FHA is the only option.  As a result more and more people are relying on FHA.  Not to say that ALL FHA borrowers are not credit-worthy BUT certainly some at the margin will cost the FHA some money.


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