Will Ben Carson, Secretary Of HUD Nominee, Pose Any Risk To The FHA Mortgage Program?

By | December 12, 2016

FHA Mortgage charts

The Department of Housing and Urban Development, or HUD, is the federal agency with stewardship over the critically important FHA mortgage program!

Why are FHA mortgages so critical to many homebuyers and therefore to any continued strength in the housing market going forward?

Because a fact that many might not be aware of is that FHA which buys qualifying loans made by lenders, along with loans guaranteed by the Veterans Administration, accounted for 23% of mortgages originated in the first half of 2016! (Source: Urban Institute)

HUD Secretary nominee Dr. Ben Carson, a former neurosurgeon with no apparent administrative or government experience, at first glance appears to be an odd pick for a far-flung federal bureaucracy that in fact controls programs that affect a great many Americans.

That said, a great many government appointees from the past who actually did possess the experience that Ben Carson is missing have not necessarily done their jobs very well.

With confirmation hearings still to come, it’s a fluid wait and see situation but in the meantime here’s a look at some very interesting FHA mortgage statistics…

FHA Loans By The Numbers! (Charts)

Some observations from the charts below include the fact that while overall mortgage delinquency rates have been declining, the delinquency rates for mortgages made over the past few years are on the rise.

Not surprisingly, the distribution of FICO scores has also been on the decline over the same period.

And, given that the average Loan-to-Value for new purchase FHA loans is about 96%, there is precious little margin for error concerning the financial well-being of borrowers.

Questions or observations? Send them to Michael Haltman at his contact information below.

Chart of FHA mortgages as a percentage of all mortgage originations

Source: HUD

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Michael Haltman is President of Hallmark Abstract Service in New York and Board Chair of Heroes To Heroes Foundation.

He can be reached at mhaltman@hallmarkabstractllc.com or at 516.741.4723.

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