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FHASecure: How Big A Dud?

by Peter G. Miller
December 21st, 2007

President Bush, HUD Secretary Jackson and Secretary of the Treasury Paulson all provided big estimates to support the FHASecure program and all are now presumably embarrassed by the realities of the HUD effort. If they are embarrassed — if they have any sense of compassion for the people nationwide who are losing their homes — they will want to get to the bottom of the FHASecure debacle as much as anyone.

HUD has said that it had “already refinanced” 33,000 struggling subprime borrowers under the FHASecure program.

Here’s what we actually know.

First, we had Patrick Rucker with Reuters who broke this story by reporting the HUD had only funded 266 loans to date under the FHASecure program.

Second, we looked at official HUD data and determined that during the last two weeks of November HUD only refinanced 87 loans to delinquent conventional borrowers. You remember — those were the borrowers the program was supposed to help.

Third, working with Moe Bedard over at LoanWorkout.org, we showed that the total number of loans refinanced during the entire month of November amounted to — ta da — 155, according to HUD’s own records.

Now we have Diana Olick at CNBC adding this explanation: “FHA Secure has receive(d) about 3,000 applications from homeowners who are delinquent on their loans and has closed on about 600 since September, that answer from an official HUD staffer who gave me the actual numbers after more than one request.”

Let’s be very clear about this: The FHASecure program was supposed to be a way that borrowers could refinance existing toxic loans and save homes from foreclosure. That’s it.

If HUD can turn 266 loans, or 155 loans, or 600 loans into 33,000 loans and claim success, then how do we know that any numbers or any information from HUD is accurate or believable?

HUD owes the public an explanation. HUD must tell the public how many borrowers with toxic loans have been saved from foreclosure under the FHASecure program. Saving people from foreclosure was the promise and the purpose of the FHASecure program.

No doubt Mr. Bush, Mr. Jackson and Mr. Paulson would also like a straight answer. Right?

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This entry was posted on Friday, December 21st, 2007 at 3:49 am and is filed under , . 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.

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