FHA Watch, September 2012

Article Highlights

  • FHA’s financial condition continues to decline; Denial Dial once again reset to lowest level ever.

    Tweet This

  • House passes FHA Emergency Solvency Act including policy changes recommended by FHA Watch.

    Tweet This

  • One in six FHA loans delinquent in August; serious delinquency rate nearly unchanged at 9.49 percent.

    Tweet This

Subscribe to AEI's Financial Services emails.

FHA Watch, No. 9, September 2012

Download PDF
This Issue's Highlight

FHA’s Financial Condition Continues to Decline; Denial Dial Once Again Reset to Lowest Level Ever

One in six Federal Housing Administration (FHA) loans continued to be delinquent in August as the total delinquency rate eased slightly to 16.35 percent. This was due to modest declines across all delinquency categories.

In August, the FHA had an estimated current net worth of –$26.30 billion and a capital shortfall of $46–65 billion. The FHA’s estimated net worth on a generally accepted accounting principles (GAAP) basis has declined by $10 billion since the end of FY 2011. As a result of these data, the Denial Dial has been reset to –2.43 percent, eclipsing the previous low set in July 2012.

This Month’s Features

Spotlight on Returning the FHA to Its Traditional Mission
Reforms Needed to Get the FHA Back on Track

Spotlight on Insolvency
FHA’s Estimated Net Worth Continues Sharp Decline to –$26.30 Billion, with a Capital Shortfall of $46–65 Billion

Spotlight on Delinquency
One in Six FHA Loans Delinquent in August; Serious Delinquency Rate Nearly Unchanged at 9.49 Percent

Spotlight on Best Price Execution
Fannie Guarantee Fee Increase May Further Entrench Ginnie Brands’ Pricing Dominance

The Road Map to FHA Reform
House Passes FHA Emergency Solvency Act Including Policy Changes Recommended by FHA Watch

Also Visit
AEIdeas Blog The American Magazine
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

What's new on AEI

image The Census Bureau and Obamacare: Dumb decision? Yes. Conspiracy? No.
image A 'three-state solution' for Middle East peace
image Give the CBO long-range tools
image The coming collapse of India's communists
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Wednesday, April 23, 2014 | 12:00 p.m. – 1:30 p.m.
Graduation day: How dads’ involvement impacts higher education success

Join a diverse group of panelists — including sociologists, education experts, and students — for a discussion of how public policy and culture can help families lay a firmer foundation for their children’s educational success, and of how the effects of paternal involvement vary by socioeconomic background.

Thursday, April 24, 2014 | 12:00 p.m. – 1:30 p.m.
Getting it right: A better strategy to defeat al Qaeda

This event will coincide with the release of a new report by AEI’s Mary Habeck, which analyzes why current national security policy is failing to stop the advancement of al Qaeda and its affiliates and what the US can do to develop a successful strategy to defeat this enemy.

Friday, April 25, 2014 | 9:15 a.m. – 1:15 p.m.
Obamacare’s rocky start and uncertain future

During this event, experts with many different views on the ACA will offer their predictions for the future.   

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.