HUD sends out SWAT Teams
Concerns that bad actors may be originating or brokering FHA-isured loans, FHA has reactivated its Special Work Assessment Teams (SWAT) to conduct single-focus on-site reviews of lenders whose originations are exhibiting signs of distress. SURPRISE! Unannounced, these teams come on site to check up on abuses.
The HUD Secretary finally has admitted early payment defaults on FHA-insured loan have significantly increased, but he’s still not figured out a lot of the percentages he’s looking at, are being distored by the rising overall growth. At first glance inexperienced people don’t spot the ‘dollars in jeopardy’ are being divided by an ever growing outstanding in portfolio size, so it looks like you’re out-running your delinqnency (for now), but he’ll get surprised later, once the production slows back to the historically low levels FHA’s played in our industry, but the dollars defaulting will continue to rise.
Once you’ve seen this happen, right as it’s hapening (like now), it’s obvious to those long experienced people who have been there done that, as I have. Thankfully they’re at least trying to start and get out front on this coming mess at FHA.
LOL !! I seriously doubt that anyone in government has a f-ing clue. Fortunately for the FHA, they are currently booking a fair amount of loans that are not of the traditional low quality that has been their hallmark. Booking better loans than the norm, and increasing the UFMIP to 1.75% with a recurring .50% MMIP may allow the program to remain solvent. Once again, those who pay their bills in a timely manner are penalized by the slugs that can’t seem to properly budget their money. They should have risk-based pricing !! Unfortunately, paying a higher rate based on previous shit credit is deemed discriminatory.
Comment by Dave Gray — April 14, 2009 @ 2:59 pm
Thanks for your thoughts Dave, I always appreciate your viewpoint!
Peter
Comment by Secret! — April 14, 2009 @ 3:57 pm