FHA New Foreclosures Jump as Modified Loans Default

By Patrick   follow   Wed, 9 May 2012, 12:11pm PDT   ↑ Like   ↓ Dislike   725 views   2 comments   Watch (0)   Share   Quote   Permalink  

http://www.bloomberg.com/news/2012-05-09/fha-new-foreclosures-jump-as-modified-loans-default-mortgages.html

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San Diego Renter   befriend (1)   ignore (0)   Fri, 11 May 2012, 5:00am PDT   Share   Quote   Like   Dislike     Comment 1

This is infuriating. It was 100% foreseeable that issuing credit to bad credit risks with little-to-no-skin-in-the-game in a downdrafted market would result in losses. It is going to be you and I paying for those losses. This goes beyond bad risk management - it's policy based on a terrible incentive structure.

drtor   befriend (2)   ignore (0)   Sat, 12 May 2012, 9:37am PDT   Share   Quote   Like   Dislike     Comment 2

San Diego Renter says

This is infuriating.

Yes, although IMO helpful to get us towards normal lending standards. Our political overlords (yes, even Barney Frank) have recently shown that they are willing to tighten FHA standards and increase FHA fees, if the alternative is another bailout.

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