home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News

 

Mortgage News

HOT Topics

production

servicing

compliance

legal

fraud

secondary

jobs

appraisal

site map

www.loan-academy.com/
twitter linkedin
facebook google+
Search:

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Nonprime and Subprime News | Subprime Statistics
Stories about non-QM products. Coverage of subprime, Alt-A and
hard money lending. Home-equity loans and home-equity lines of credit.


Subprime FHA Product Back on Track

HUD estimates 62,000 subprime borrowers would get loan in first year

September 17, 2003

By PATRICK CROWLEY


The Bush administration's plan to create a multibillion subprime mortgage product that had been derailed in a U.S. House committee is back on track thanks to the favorable nod of a Senate panel.

The Senate Appropriations Committee has revived budget language that would pump $36.1 billion into the Department of Housing and Urban Development (HUD) for a Federal Housing Administration (FHA) program geared to borrowers with poor or damaged credit. Earlier, the House Appropriations Committee had gutted the money from the budget after concerns were raised that the program could carry a default rate as high as 15%.

Now that the Senate committee has reinserted the money into a spending bill for three federal agencies -- including HUD -- the legislation will move on to the full Senate and then back to the House for final approval. A vote has not been set, but Congress traditionally wraps up major spending bills in October.

The program was a part of the 2004 budget request President George Bush submitted to Congress, according to testimony National Association of Realtors (NAR) president Cathy Wathley gave to the Senate Banking, Housing and Urban Affairs Committee in June.

Borrowers would be required to meet debt, income and repayment ability standards but are not required to meet traditional underwriting standards because of their credit rating, she said.

The loans would carry higher insurance premiums of up to 1%, but after two years of on-time payments the premium would be reduced.

"We support development of such a product, which would expand home purchase opportunities for more borrowers," Wathley told lawmakers according to a transcript of her testimony posted on the NAR website. "Homebuyers with impaired credit are customarily at risk for predatory lending. We believe an FHA loan of this type would protect these borrowers, and offer them more opportunities for home purchase without subjecting them to a lifetime of higher premiums."

HUD estimates that 62,000 "credit-impaired homebuyers" would receive a mortgage loan in the program's first year, Wathley said. The program is also expected to generate $7.5 billion a year in additional insurance volumes for the FHA, she added.

According to information provided by the NAR, one out of every seven American families, a total of 13 million, has "critical housing" needs, and more than 7.5 million renters are also in a "critical" situation due to living in substandard housing or paying more than 50 percent of their income on housing.

"We welcome the opportunity to work with the administration and Congress to develop an FHA subprime loan product," Wathley said.

In a statement the Washington-based National Home Equity Mortgage Association said it is still evaluating the program and has not yet taken a position. Many of the group's members -- subprime and home equity lenders -- stand to lose at least a portion of their business to an FHA subprime product.


Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at: [email protected]

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders