It’s Friday, and it sounds like mortgage fraud has not been reduced by tighter standards- it has merely shifted to a different venue:
WASHINGTON — As the Federal Housing Administration has stepped in to help stabilize the housing market by underwriting more mortgages, the Depression-era agency is seeing growing default rates that could undermine its health, the Department of Housing and Urban Development inspector general testified Thursday.
Kenneth Donohue also told the Senate Appropriations housing subcommittee that unscrupulous lenders who helped precipitate the housing crisis with subprime loans are moving into the FHA loan system, and the number of fraud cases is a growing concern.
Sen. Patty Murray, D-Wash., who chairs the subcommittee, said that if the FHA can’t pay its debts, Congress may have to cover the shortfall.
"And we don’t have the dollars to do it," Murray said.
Clearly the FHA has it’s problems, but there’s a lot of that going around. What other problems should we look at? This is an open thread, so let us know what’s on your mind.
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I say MODS, mods, mods.
Unregulated, unlicensed, Loan modification Co’s now backed by Ambulance Chasing Law firms. They typically require 3,500 upfront and convince desperate homeowners to make the payments they would normally make to the lender to be made to them. Their pitch is you need to be two months behind. These payments force the client into a foreclosure never being able to catch up.
The 11K NOTS in Phoenix Metro area attributed to the aggressive Mods pitching on TV and hiring salesmen with easy money and that they provide a helpful service. Ugly.
CR is all over this one today …
“The DAP Legacy: FHA Delinquencies Rise Sharply in 2008″, Calculated Risk, April 4, 2009.
DAP == “Down payment Assistance Program”