{"id":1228,"date":"2013-02-07T22:47:21","date_gmt":"2013-02-08T02:47:21","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=1228"},"modified":"2020-12-02T07:38:22","modified_gmt":"2020-12-02T12:38:22","slug":"necessary-reforms-to-save-fha","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2013\/02\/07\/necessary-reforms-to-save-fha\/","title":{"rendered":"Necessary reforms to save FHA"},"content":{"rendered":"

by Dan Krell
\nDanKrell.com<\/a>
\n\u00a9 2013<\/h3>\n

\"home<\/a>After the financial and foreclosure crises<\/a>, FHA became the workhorse that not only kept the housing industry afloat, but assisted many financially distressed home owners keep their homes. After taking the brunt of the crises and almost facing insolvency, it\u2019s time for FHA to get back to helping home buyers who might not otherwise have the means of purchasing a home.<\/p>\n

The Federal Housing Authority<\/a> (also known as FHA) was established in 1934, to help jump start a housing industry that was decimated by the Great Depression. Much like the housing downturn of the recent \u201cGreat Recession\u201d which followed a housing boom; the 1930\u2019s housing bust followed a 1920\u2019s housing boom. At a time when a majority of Americans rented, the FHA provided the means for would be home buyers to become home owners.<\/p>\n

Unless you\u2019re familiar with the FHA\u2019s history, you might have questioned the use of FHA as a means to refinance home owners with underwater mortgages as well as assisting those in foreclosure. However, FHA has a history of assisting home owners facing financial uncertainty, as well as making mortgages available to home buyers during times when conventional lenders were not lending. And although many criticized such assistance programs as being unnecessary and wasteful; in retrospect, these measures were significant and necessary during an uncertain time for the housing industry \u2013 regardless of the outcomes.<\/p>\n

Last year, the outcomes of mortgage and home owner assistance programs were highly criticized as being responsible for almost bankrupting FHA. Although many describe FHA\u2019s woes stemming from being saddled with non-performing loans and a historic number of borrowers; Tami Luhby<\/a>, in her January 24th 2012 article in CNNMoney (Has Obama’s housing policy failed?; cnnmoney.com), provides some insight to the crises related assistance programs\u2019 lender related bureaucratic issues and low success rates. She reported that at the time of her article, the HAMP program only helped about 910,000 home owners refinance to lower interest rate mortgages instead of the planned 4 million; and the HARP program \u201c\u2026 which was intended to reach 5 million borrowers, has yielded about the same results. Through October [2011], when it was revamped and expanded, the program had assisted 962,000\u2026\u201d<\/p>\n

It comes as no surprise that after eroding capital reserves, congressional hearings were held late last year to address FHA\u2019s losses. As a result, FHA plans to shore up its financial short falls by increasing mortgage insurance premiums, increased down payment requirements for loans in excess of $625,500, as well as tightening underwriting standards.<\/p>\n

FHA\u2019s survival may come down to its perceived role in housing industry. And of course, there is criticism from both sides: some argue that FHA\u2019s losses have become an unsustainable burden; while others argue the tightening measures will hurt the housing market and limit home ownership.<\/p>\n

So, when I read Jacob Gaffney\u2019s<\/a> January 15th lamentation about refinancing out of an FHA mortgage (Refinancing Away From the Government; With an FHA Blessing: housingwire.com), the planned FHA changes not only make sense, but is necessary to preserve the access to homeownership that FHA provides. FHA Commissioner Carol Galante\u2019s response to Gaffney not only impressed him, but may sum up the FHA mission: \u201c\u2026The role of FHA is to enable homeowners. FHA helped you get your home, made it happen” \u2026”If you find you can move on, then I’m pleased you have that opportunity.”<\/p>\n

More news and articles on \u201cthe Blog\u201d<\/a>
\n\"Protected<\/a>
\nThis article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws. Copyright \u00a9 2012 Dan Krell.<\/p>\n","protected":false},"excerpt":{"rendered":"

by Dan Krell DanKrell.com \u00a9 2013 After the financial and foreclosure crises, FHA became the workhorse that not only kept the housing industry afloat, but assisted many financially distressed home owners keep their homes. After taking the brunt of the crises and almost facing insolvency, it\u2019s time for FHA to get back to helping home … <\/p>\n

Continue reading “Necessary reforms to save FHA”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[76,270],"tags":[837,490],"class_list":["post-1228","post","type-post","status-publish","format-standard","hentry","category-fha","category-home-buyer","tag-fha","tag-home-buyer-2"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-jO","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=1228"}],"version-history":[{"count":4,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1228\/revisions"}],"predecessor-version":[{"id":6094,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/1228\/revisions\/6094"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=1228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=1228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=1228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}