HUD says FHA is doing ok. Is it true?

Is FHA next to fail? And proposal on how to unwind Fannie/Freddie.

[Critical Loan Limit Update on 11/18/2011] We appear to be marching toward a reduction in the temporary loan limits, although there are numerous attempts to extend it. HUD weighed in last week with its FHA single-family loan limits which are effective on or after October 1, 2011 through December 31, 2011.

Banks are sitting on huge amounts of cash. The reasons for this include reserves held for bad loans, the inability to find credit-worthy lending outlets, and the continued threat of mortgage buybacks by government agencies. American Banker reports that loan repurchase requests from Fannie Mae and Freddie Mac are finally tapering off but that the [...]

Some look forward to Sports Illustrated’s Swimsuit Edition or Time’s Man of the Year. I don’t think that the FDIC’s Supervisory Insights: Foreclosure Edition will garner the same attention, but it is useful to banks who service loans nonetheless because it outlines the FDIC’s position on foreclosure practices.

Writing daily market commentary can make one feel like a robot, but I’ll be so bold as to say a computer can’t do it better because market participants have too many differing agendas. That said, a robot writer just bested a sports writer. So to the financial writers linked below: watch your backs. Bleep, blorp.

According to Bureau of Labor Statistics data, mortgage industry jobs are down 50% in the past five years. The industry hit a peak in early 2006 at 505,000 but is now at 248,000. Granted, many who shouldn’t have been in the business have left and there was excess manpower 5 years ago, but the stat [...]

Rates ended last week down .125% after mortgage bonds rallied huge Friday (FNMA 30yr 4% coupon +62 basis points) on tame March consumer inflation (CPI) data. Rates drop when bond prices rise on such a rally, and perception of low inflation encourages bond buying.

Yesterday I mentioned FHA mortgage insurance increases coming this Monday, and had the following explanation of private mortgage insurance, which was then clarified (also below) by an account rep from a big mortgage insurance provider.

Monday April 18 is the day mortgage insurance (MI) increases for FHA loans, a move that may drive more home loan borrowers with less than 20% equity into private mortgage insurance products which may end up being cheaper. Consumers need to talk to their mortgage advisors to explore which option—FHA or private mortgage insurance—is most [...]