Industry NewsMortgage

FHA not ‘the new subprime’?

Fed analysis shows prime borrowers fueled growth
Published on Oct 2, 2009

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by CareyBot

Rapid growth in Federal Housing Administration loan guarantees may be a byproduct not only of the demise of subprime lending, but higher loan limits and the limited capacity of private mortgage insurers, a Federal Reserve analysis of data collected from mortgage lenders and other sources reveals.

The Federal Reserve report, released Wednesday, suggests that most of the the growth in FHA lending has been in lending to borrowers with higher credit scores, which could bode well for future claims against the FHA insurance fund.

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