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FHA Mortgages at Mid-Year: Real Numbers Comes Out

by Peter G. Miller
April 28th, 2008

Given all the claims made by HUD regarding it’s efforts to save American borrowers from foreclosure, it’s revealing to see what their own statistics say.

We now have in hand the official six-month report from the FHA — the government’s fiscal year starts October 1st so now we can we what HUD has accomplished during the first six months of the fiscal year.

On one hand, we have former HUD Secretary Alphonso Jackson telling the world that “FHASecure has helped more than 100,000 families stay in their homes. Homeowners are cutting their monthly mortgage payments by an average of $400 a month compared to their exotic subprime loans. They no longer have anxiety about finding foreclosure notices in their mailboxes, thanks to the safe mortgage alternative that FHASecure offers.”

Alternatively, we have actual numbers from HUD. The good news is that lots of people have been able to use the FHA program. The bad news? The glaring failure of the FHASecure program — just 1,729 delinquent conventional borrowers have been helped in a period of six months.

“At midyear,” says HUD, “FHA had received 762,266 single family program applications — almost one and a half times greater for this period last year — 311,581. This is partially due to the housing crisis in the sub prime market and the FHA Secure Program.

“Of this total, 43,631 applications covered proposed construction and 718,635 involving existing home sales. Also, broken out by loan type, 298,220 were for purchase cases and 390,337 were for a refinance transaction. These refinances involved 78,209 FHA to FHA actions. 305,077 conventional mortgage conversions to FHA and 7,051 delinquent conversional to FHA. In addition, 73,709 HECM applications were received.

“So far this year. 351,615 forward mortgages were insured as well as 55,218 reverse mortgages. By type of mortgage. 179,153 purchase money mortgages were endorsed, of which 142,457 were for first time home buyers.

“Of the refinance forward mortgages, 38,852 were FHA to FHA refinances, 131,881 were conventional to FHA closings and 1,729 delinquent conventional.

“It should also be noted that 63,962 refinanced transaction involved a cash out — 37% of the refinances.”

The FHASecure program was sold as a way to prevent foreclosures. No matter what math skills you have, 1,729 does not equal 100,000 or anything close. Meanwhile, while HUD has done virtually nothing, foreclosure notices continue to go out at a rate of more than 7,500 a day.

It may well be that your home is owned free and clear of any mortgage debt or that you have a solid fixed-rate loan, but if foreclosures begin to crop up in your neighborhood guess what will happen to the value of your house?

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