FHA wins
By admin | June 27, 2007
In a stunning upset, FHA backed loans produced fewer foreclosures than subprime loans. No one could have predicted this magnificent upset as subprime loans had more than twice as many foreclosures as their FHA loan counterpart.
These loans are very much the same as both recipients are first time homebuyers and possess less than stellar financial standing.
“We serve at-risk borrowers,” said Montgomery, a keynote speaker at a homeownership preservation forum at HUD’s Denver office. Montgomery oversees the $400 billion FHA insurance portfolio.
“The key is the FHA’s loss-mitigation program,” Montgomery said. “We want to keep people in their homes.”
In the 80’s, the HUD was the largest landlord in the Greater Denver area having close to 15,000 foreclosed homes in its possession. With 65 percent of the mortgages in Denver being FHA insured loans, while today that figure is around five percent.
There were only 247 foreclosed FHA insured homes in Colorado for May. Colorado ranks 10th in the nation for foreclosure rate in the United States.
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