Thanks for correcting this article. I was going to do it but you’ve done it nicely. It’s all we can do to surf the web looking for misleading information and posting the truth. It’s a full time job to stay on top of the spin.

Angrywoodchuck

FHA mortgages have LOWER foreclosure levels than prime loans. Who says so? The Mortgage Bankers of America. As the Association reported in August, 3.00 of all prime loans were in the process of foreclosure versus 15.05 percent for subprime loans and 2.98 percent for FHA mortgages.”

That’s the furthest thing from reality. The only reason FHA foreclosures are lower is that they weren’t the primary source for subprime mortgage lending until 2007. Even in this downturn, foreclosures aren’t rampant within 48 months of purchase.

The REALITY is that FHA and VA government guaranteed mortgages had a 15.1% delinquency rate as of Q2 ‘09. By comparison, prime mortgages had a 4.7% delinquency rate.

The FHA is the new subprime market and that foreclosure number is rising rapidly as delinquencies aren’t resolved.

Regardless of all I just said, the REAL reason for this change is the FHA’s reserves have dropped below 2% which means their subprime lending will soon be paid for by taxpayers.

http://homeecblog.wordpress.com/2009/10/05/fha-taxpayer-protection-act-of-2009/