FHA Watch, January/February 2013

Article Highlights

  • FHA fairy tales: separating fact from fiction.

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  • Nightmare at FHA continues, with capital continuing to decline.

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Read Vol. I, No. 12, December 2012.
Explore the Nightmare at FHA project.

This Issue's Highlight
FHA Fairy Tales

A number of fairy tales were told at the House Financial Services Committee’s February 6 hearing on the proper role of the Federal Housing Administration (FHA) in our mortgage insurance market. FHA Watch separates fact from fiction in this new recurring feature.

This Month's Features

FHA Fairy Tales
Debunking Two Fairy Tales from the Financial Services Committee’s February Hearing

Spotlight on Insolvency
FHA’s Estimated GAAP Net Worth Equals –$26.24 Billion, with a Capital Shortfall of $46–65 Billion

Spotlight on Delinquency
Overall Rate Increases to 16.72 Percent as 30-Day Delinquencies Rise

Spotlight on Best Price Execution
FHA’s Pricing Dominance Eases as Ginnie’s MBS Execution Advantage over Fannie Narrows

Spotlight on Differences Between the Practices of the VA and the FHA
An Overview of the Veterans Affairs Residual Income Approach

End the Nightmare at FHA
Fundamental and Comprehensive Reform of the FHA Is Urgently Needed

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About the Author

 

Edward J.
Pinto
  • American Enterprise Institute (AEI) resident fellow Edward J. Pinto is the codirector of AEI’s International Center on Housing Risk. He is currently researching policy options for rebuilding the US housing finance sector and specializes in the effect of government housing policies on mortgages, foreclosures, and on the availability of affordable housing for working-class families. Pinto writes AEI’s monthly Housing Risk Watch, which has replaced AEI’s FHA Watch. Along with AEI resident scholar Stephen Oliner, Pinto is the creator and developer of the AEI Pinto-Oliner Mortgage Risk, Collateral Risk, and Capital Adequacy Indexes.


    An executive vice president and chief credit officer for Fannie Mae until the late 1980s, Pinto has done groundbreaking research on the role of federal housing policy in the 2008 mortgage and financial crisis. Pinto’s work on the Government Mortgage Complex includes seminal research papers submitted to the Financial Crisis Inquiry Commission: “Government Housing Policies in the Lead-up to the Financial Crisis” and “Triggers of the Financial Crisis.” In December 2012, he completed a study of 2.4 million Federal Housing Administration (FHA)–insured loans and found that FHA policies have resulted in a high proportion of working-class families losing their homes.

    Pinto has a J.D. from Indiana University Maurer School of Law and a B.A. from the University of Illinois at Urbana-Champaign.

  • Phone: 240-423-2848
    Email: edward.pinto@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: 202-419-5212
    Email: emily.rapp@aei.org

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