Is FHA sending its most profitable, lowest-risk customers -- homebuyers who have very good to excellent credit -- to Fannie and Freddie for their mortgages, thereby losing significant market share? Yes. Are FHA’s multiple and costly hikes to its insurance premiums -- and worst of all, its revocation of borrowers’ rights to cancel premium payments during the term of the loan -- beginning to have a negative impact on its ability to retain good-quality homebuyers? Yes. Are credit scores on the downgrade at FHA as the agency turns off new buyers with FICO scores above 700? Absolutely. But is all this necessarily bad news? Does it point to an emerging case of adverse selection -- something that’s especially ill-timed given Congress’ mandate to the agency to rebuild its...
Dec 31, 2013 by Ken Harney
Dec 3, 2013 by Ken Harney