FHA Watch, July 2012

Article Highlights

  • 1 in 6 FHA loans delinquent in June.

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  • FHA's net worth down $6B since end of FY 2011.

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  • FHA Denial Dial reaches its lowest level this year.

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This Issue’s Highlight

FHA Watch, No. 7, July 2012

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FHA’s Financial Condition Worsens; Denial Dial Reset to Lowest Level Ever.
One in six Federal Housing Administration (FHA) loans was delinquent in June as the total delinquency rate increased to 16.61 percent. This was due almost entirely to a jump in thirty- and sixty-day delinquencies. The serious delinquency rate ticked up to 9.48 percent.

The FHA’s estimated net worth on a generally accepted accounting principles (GAAP) basis has declined by $6 billion since the end of FY 2011. In June, the FHA had an estimated current net worth of –$23.23 billion and a capital shortfall of $43–62 billion. As a result, the Denial Dial has been reset to –2.16%, eclipsing the previous low set in January 2012.

This Month’s Features

Note from the Editor: The July and August issues of FHA Watch will be limited to updating the monthly features only while we work on analyzing the impact of FHA lending practices on our communities.

Spotlight on Insolvency
FHA’s Estimated Net Worth Continues Sharp Decline to –$23.23 Billion, with a Capital Shortfall of $43–62 Billion

Spotlight on Delinquency
One in Six FHA Loans Delinquent in June, and Serious Delinquency Rate Ticks Up to 9.48 Percent

Spotlight on Best Price Execution
Government Mortgage Complex’s Ginnie Brands Improve on Their Continued Pricing Dominance over Fannie Mae

The Road Map to FHA Reform
Specific Steps to Reform and the Status of Each

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