The FHA has been under a lot a stress, so of it’s more recent loans in 2009 have started to default. However, due to higher Fees the FHA reserve fund has increased, but it’s still on thin ice.
By Clea Benson – Aug 2, 2012 1:59 PM PT
The Federal Housing Administration may end the fiscal year with about $3 billion in reserves after premium increases and rising loan volume offset a previously forecast shortfall, people with knowledge of the numbers said.
U.S. Department of Housing and Urban Development officials cited the turnaround to lawmakers today as Democrats push for a Senate vote on Carol Galante’s nomination to head the agency, according to the people, who declined to be identified because the discussions are private. Galante, 57, has been acting head of FHA, which is overseen by HUD, since July 2011.
“Carol Galante has taken action to change the way that HUD and FHA do business, including steps to help FHA better manage risk,” according to a HUD document that has been circulating among members of Congress.
The improved picture has emerged after months of turmoil at FHA, which in February was set to ask for a $688 million in a taxpayer subsidy that would have been the first in its 80-year history. The need for a subsidy was eliminated when the agency received nearly $1 billion from a legal settlement with mortgage servicers over flawed foreclosure practices.
FHA’s troubles stemmed from rising defaults on mortgages it insured as it took an expanded role in the market during the peak years of the housing bubble. The agency now insures about 7.1 million loans with outstanding balances totaling more than $1 trillion, triple the amount it held five years ago.
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Proprietary OC Housing News home purchase analysis
$309,900 …….. Asking Price
$535,000 ………. Purchase Price
5/12/2007 ………. Purchase Date
($225,100) ………. Gross Gain (Loss)
($42,800) ………… Commissions and Costs at 8%
($267,900) ………. Net Gain (Loss)
-42.1% ………. Gross Percent Change
-50.1% ………. Net Percent Change
-10.3% ………… Annual Appreciation
Cost of Home Ownership
$309,900 …….. Asking Price
$10,847 ………… 3.5% Down FHA Financing
3.70% …………. Mortgage Interest Rate
30 ……………… Number of Years
$299,054 …….. Mortgage
$78,738 ………. Income Requirement
$1,376 ………… Monthly Mortgage Payment
$269 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$77 ………… Homeowners Insurance at 0.3%
$312 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
$2,034 ………. Monthly Cash Outlays
($208) ………. Tax Savings
($454) ………. Equity Hidden in Payment
$13 ………….. Lost Income to Down Payment
$97 ………….. Maintenance and Replacement Reserves
$1,482 ………. Monthly Cost of Ownership
Cash Acquisition Demands
$4,599 ………… Furnishing and Move In at 1% + $1,500
$4,599 ………… Closing Costs at 1% + $1,500
$2,991 ………… Interest Points
$10,847 ………… Down Payment
$23,035 ………. Total Cash Costs
$22,700 ………. Emergency Cash Reserves
$45,735 ………. Total Savings Needed
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