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Why Fool With Success?

by Peter G. Miller
March 10th, 2008

If you want a really good reason not to “modernize” the FHA program with smaller down payments and risk-based insurance premiums, just look at the quarter-to-quarter foreclosure data from the Mortgage Bankers Association:

___ The foreclosure start rate for prime ARMs increased from 0.41 percent to 1.06 percent.

___ Subprime fixed foreclosure starts increased 14 basis points to 1.52 percent.

___ Subprime adjustable-rate foreclosure starts increased 57 basis points to 5.29 percent.

“The total delinquency rate is the highest in the MBA survey since 1985. The rate of foreclosure starts and the percent of loans in the process of foreclosure are at the highest levels ever,” according to the association.

And what about FHA mortgages?

“FHA foreclosure starts decreased 4 basis points to 0.91 percent,” says the MBA.

Isn’t that good news? Given increasing FHA demand and falling FHA foreclosure levels, isn’t theat a solid, objective reason to keep the FHA program humming along just the way it is?

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