“The agency’s share of the mortgage market is up from 2 percent three years ago to nearly a third of the mortgages now made, its highest level in at least two decades, according to Inside Mortgage Finance, an industry trade publication.”
It seems to me that if the amount of loans they make MORE than tripled during the time period under question (very likely considering the quote above, even in a declining housing market. If their market share went up by a factor of 16, then unless the overall number of mortgages fell by at least a factor of 5 (which it hasn’t), then their actual “instant default” rate has actually DROPPED).
I can understand why their overall rate of default is going up simply due to the economic times. Frankly, if you look at all loans originated during the 2005-2008 time frame, even the ultra-primes with perfect fico’s, 20% down payments, and heavy reserves are defaulting at higher rates now.
Since they didn’t actually indicate what the increase in the FHA’s overall default rates are, the article seems to me to be a bit weak in statistics to support their position (their only other measurable was a very high default condo-conversion complex located in one of the epicenters of housing wealth destruction). Though their position may in fact be true, the article as written does a poor job of supporting it’s conclusions.
