FHA Outdoes Fannie and Freddie, Signals "a Very Sick System"
Filed under: no shit, Sherlock.
The FHA is the new Fannie/Freddie and between them, have financed 90% of new home loans in the US. That's not just government intervention, it's full-on life support. And yet Fannie and Freddie aren't truly a financial obligation of the United States? OK sure.
Loans guaranteed by the Federal Housing Administration, the U.S.-owned mortgage insurer, may be involved in more home-purchase transactions than borrowing financed by Fannie Mae and Freddie Mac.
FHA lending last quarter may have topped the combined volume of government-supported Fannie Mae and Freddie Mac in a home-lending market that’s still a “government-financed market,” David Stevens, the agency’s head, said today at a conference in New York, citing research by consultant Potomac Partners.
“This is a market purely on life support, sustained by the federal government,” he said at the Mortgage Bankers Association conference. “Having FHA do this much volume is a sign of a very sick system.”
For additional reading, I recommend Existing Home Sales: Inventory increases Year-over-Year via Calculated Risk.
It's sad when even full on life support can't save home sales, ain't it?