Mish's Global Economic Trend Analysis Tue 2010-06-01 19:42 EDT

FHA Volume Sign of `Very Sick System'; Fannie, Freddie, FHA Account for 90% of Mortgage Market

Michael Shedlock

The US mortgage market is extremely sick and getting sicker every month. For the first time ever, the FHA is issuing more mortgages than Fannie and Freddie. The reason is the FHA has lower down payments...Recovery my ass.

90; Fannie; FHA accounts; FHA Volume Sign; Freddie; Mish's Global Economic Trend Analysis; mortgage markets; Sick System.

Bruce Krasting Tue 2010-03-09 17:10 EST

Some Thoughts on Fannie's Horrible Year

Bruce Krasting

Fannie Mae released it's annual and 4th Q numbers after the close on Friday and during one hell of a messy snowstorm. FNM posted a loss of $16.3b for the quarter and $74.4b for the year. An unmitigated disaster. The timing of the release suggests that they were hoping that no one would notice how bad the last twelve months were. There was nothing particularly new in the most recent quarter, just more bad news. What is happening at Fannie is also happening at Freddie Mac and to a different extent at FHA. There are some trends that I think are worth noting...they have moved to restrict lending to better borrowers...all three of the D.C. mortgage lenders are pulling on the credit reins...It will be harder to get a mortgage in one month from today and even harder to get one six moths from today. For me the implications of this are very obvious. Broad RE values will have to go lower, high-end homes will suffer the most in percentage drops...the biggest seller of RE over the past 24 months in America has been the federal government...The vast majority of defaults come because borrowers are underwater. Falling RE prices are the number one contributor to the default cycle...

Bruce Krasting; Fannie's Horrible Year; thought.

zero hedge Mon 2009-11-30 11:15 EST

Fannie Mae Reports Massive Q3 Loss, Asks For Another $15 Billion From Government As It Is Set To Become Largest US Landlord

The latest particular does of lunacy and economic calamity coming out of the intellectual midgets at Fannie and the FHA should be sufficient to push the market well into 1,100 territory tomorrow. FNM's loss for Q3 is $18.9 billion, up from $14.8 billion in Q2, a time when the market was up a good 15%: ever wonder who keeps on subsidizing those gain? That's right - you. Credit-related expenses increased to $22 billion in Q3 from $18.8 billion in Q2. Oh, and Fannie now wants another $15 billion rescue from the Treasury (which is having some troubles with getting that pesky debt ceiling raised to one googol) so it can continue with its plan of keeping shadow inventory away from the market, rent foreclosed houses to their owners at staggeringly low rates, and continue the pretence that bank's balance sheets are well capitalized...

15; asks; becoming largest; Fannie Mae Reports Massive Q3 Loss; government; landlord; set; Zero Hedge.

Mish's Global Economic Trend Analysis Mon 2009-10-19 14:15 EDT

FHA Rules Render Condos Utterly Worthless

Michael Shedlock

When it come to home ownership, condo prices are the last to rise and the first to go down. Given the glut of condos and unfinished condos in the bubble areas, the following article should not be surprising. Please consider Experts: Plummeting prices have rendered condos nearly worthless by the Arizona Republic. New federal loan-guarantee rules imposed to fend off future government losses from plummeting condominium prices have rendered condos utterly worthless, Valley real-estate experts said.

FHA Rules Render Condos Utterly Worthless; Mish's Global Economic Trend Analysis.

Dr. Housing Bubble Blog Tue 2009-10-13 20:03 EDT

No Country for Old Jobs: 10 Charts Showing the Fragile Recovery. Home Sales, Buying versus Renting, Unemployment, and Real Economy Data.

...Until jobs start showing up, any talk of a rebounding housing market is moot especially with this entire artificial stimulus still bouncing around the economy. And collapsing tax revenues are not a good sign. I don't buy the jobless recovery argument and the government tends to agree. If all is well, why is the U.S. government and Fed buying $1.25 trillion in agency debt to lower mortgage rates, putting in place an $8,000 tax credit, boosting car sales with gimmicks, encouraging risky low money down loans with FHA insured products, and extending unemployment insurance to a record 92 weeks in states like California? Do these things sounds like policies of a booming economy?

10 Charts Showing; Buying versus Renting; country; Dr. Housing Bubble Blog; Fragile recovery; home Sale; old job; Real Economy Data; unemployment.

naked capitalism Mon 2009-10-12 10:22 EDT

FHA: Next Bailout?

...The FHA has ALWAYS been in the low down payment business! It has long offered loans requiring only 3% down, long before ``subprime'' was part of the lexicon. Historically, FHA loans did not show default rates materially worse than prime loans. That experience has been replicated by not for profit lenders in low income neighborhoods...the big difference from how the FHA once did business versus its subprime competitors was.....the FHA screened loans on an individual basis. The process was time consuming and somewhat intrusive. Private lenders were faster, easier, and (lo and behold) less stringent.

Bailout; FHA; naked capitalism.

Calculated Risk Mon 2009-10-12 09:56 EDT

More on Problems at the FHA and Quote of the Day

CalculatedRisk

``I don't think it's a bad thing that the bad loans occurred. It was an effort to keep prices from falling too fast. That's a policy.'' Barney Frank, chairman of the House Financial Services Committee on recent FHA lending.The quote is from David Streitfeld and Louise Story's article in the NY Times: U.S. Mortgage Backer May Need Bailout, Experts Say

Calculated Risk; day; FHA; problem; quote.

Calculated Risk Sat 2009-10-10 13:33 EDT

FHA Bailout Seen

CalculatedRisk

From Bloomberg: FHA Shortfall Seen at $54 Billion May Lead to Bailout...The Federal Housing Administration, which insures mortgages with low down payments, may require a U.S. bailout because of $54 billion more in losses than it can withstand, a former Fannie Mae executive said. ``It appears destined for a taxpayer bailout in the next 24 to 36 months,'' consultant Edward Pinto said in testimony prepared for a House committee hearing in Washington today. Pinto was the chief credit officer from 1987 to 1989 for Fannie Mae...

Calculated Risk; FHA Bailout Seen.

The Economic Populist - Speak Your Mind 2 Cents at a Time Sat 2009-10-10 13:14 EDT

Unofficial Economic Policy: Re-Inflate the Bubble

...the Administration and the Democratically-controlled congress are dead set on re-inflating the housing bubble. There are two proposals at play: 1) extending the first-time homebuyer tax credit and 2) Increasing the loan limit amounts for Fannie, Freddie and FHA.

bubble; economic populist; Mind 2 Cents; re-inflate; speaking; Time; Unofficial Economic Policy.

zero hedge Sat 2009-10-10 13:09 EDT

Former Fannie Chief Credit Officer Says FHA Is $54 Billion Underwater

In keeping with the warnings presented by Kyle Bass warned that the entire housing bubble is now being ported over to the taxpayer's balance sheet, Edward Pinto, a former chief credit officer for Fannie Mae claims that the Federal Housing Administration will likely require a major taxpayer bailout "in the next 24 to 36 months" as it is likely to incur $56 billion more in losses than it can withstand.

54; Fannie Chief Credit Officer Says FHA; underwater; Zero Hedge.

Calculated Risk Fri 2009-09-04 19:23 EDT

FHA: The Next Bailout?

CalculatedRisk

John Burns Consulting sent out a note today titled: FHA Likely To Be The Next Shoe To Drop"The FHA's aggressive lending programs have continued throughout the housing downturn, causing its market share of the mortgage industry to grow from 2% in 2005 to 23% today. ... The FHA insurance fund, however, is likely running dry. ...

Bailout; Calculated Risk; FHA.

Tue 2008-06-10 00:00 EDT

naked capitalism: FHA Repudiates Housing Rescue Bill

FHA Repudiates Housing Rescue Bill; naked capitalism.

Tue 2008-06-10 00:00 EDT

Mish's Global Economic Trend Analysis: FHA Loses $4.6 Billion - Denies Insolvency

4; 6; Denies Insolvency; FHA Loses; Mish's Global Economic Trend Analysis.