Posted To: MND NewsWire

In the throes of the housing crisis, it sometimes seemed as though FHA was the only way to finance a home purchase , especially for those with less than stellar credit or unable to come up with a large downpayment. The government sponsored insurance program has always been, quite intentionally, a countercyclical lender and when money was flowing freely during the housing boom, FHA lending shrunk to near nothing. Subprime lenders took over its market share, offering lower underwriting standards and teaser interest rates. In 2006, FHA loans had only a 4.5 percent share of the purchase finance market. Then the crash hit, subprime lenders disappeared , and FHA’s market share soared. The agency insured 34.5 percent of the purchase market in 2010. The share is now only half that, 16.9 percent in…(read more)

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Source: Mortgage News Daily