Tuesday, May 25, 2010

Federal Housing Administration: Mortgage Market Is Very Sick

David Stevens, head of the Federal Housing Administration said yesterday that the mortgage market is purely on life support, and is sustained by the federal government,”.

According to Bloomberg, loans guaranteed by the FHA (the U.S.-owned mortgage insurer), may be involved in more home-purchase transactions than borrowing financed by Freddie and Fannie. FHA lending last quarter may have topped the combined volume of both of them in a home-lending market that’s still a “government-financed market.”

Stevens adds that “Having FHA do this much volume is a sign of a very sick system.”

"The FHA, which backs loans with down payments as low as 3.5 percent, insured $52.5 billion of home-purchase mortgages in the first quarter, compared with $46 billion of purchases of the debt by Fannie Mae and Freddie Mac, according to data compiled by Washington-based Potomac Partners".

The FHA, Freddie and Fannie have been financing more than 90% of U.S. home lending.

Stumble Upon Toolbar

No comments:

Financial TV

Blog Archive

// adding Google analytics