FHA Mortgage Guide

This is a blog where we call things as we see them. That means we’re critical when we think criticism is appropriate and we’re supportive when we think folks have done something right.

All of which brings us to the FHA. There are some things which the FHA could do better — for instance, restoring FHA ARM caps to one and five (1/5) instead of the far-costlier to one and six caps (2/6) which are now in place and speed higher borrower costs when rates are rising.

Friday there is testimony from FHA Commissioner Brian Montgomery which is really remarkable. While much of the mortgage world continues to fall into a so-far bottomless abyss, Montgomery says the FHA is actually doing better. Just look at the testimony that he gave on Friday before the House Financial Services Committee chaired by Rep. Barney Frank (D-MA).

“In Fiscal Year 2007,” says Montgomery, “FHA provided loss mitigation support to 91,000 borrowers, 86,500 of whom then cured their defaults and stayed in their homes.

“While not every one of these borrowers will be successful in the long term, historically 89% of all borrowers who benefit from loss mitigation still have active loans two years after the assistance.

“This success is responsible in part for a reduction in both the number and percentage of FHA foreclosures, with the foreclosure rate dropping from a high of 1.74% of insured loans in FY 2004 to 1.45% in FY 2007.”

As we have been reporting, FHA numbers during the past year are up significantly. In addition, the new FHASecure program is a winner that will help a lot of people.

All of this is hugely impressive and good reason to congratulate Mr. Montgomery and the folks at FHA.

Now, about those ARM caps….

Check out these FHA resources for more information

This entry was posted on Sunday, November 4th, 2007 at 12:32 pm and is filed under FHA, FHASecure. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.