FHA Watch, September 2012

Article Highlights

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

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

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

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FHA Watch, No. 9, September 2012

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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

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Edward J.
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