The government's mortgage programs are hot right now. There's no doubt about it. The numbers tell the story--even though everyone's numbers have a slightly different take on the situation. Bottom line, however, is most lenders today see government lending as a no-brainer.
Department of Housing and Urban Development (HUD) Secretary Shaun Donovan told a conference of real estate journalists in Washington, D.C., that the Federal Housing Administration's (FHA's) market share has grown sharply to fill the vacuum left when nonconforming loans abruptly left the building. In a speech to the National Association of Real Estate Editors' annual Real Estate Journalism Conference, Donovan said FHA's share had gone from roughly 2 percent in 2006 to almost 24 percent today. He conceded to the group that "obviously we would prefer that the private market" were taking a little bit more share than it is currently. But he emphasized it was critical for FHA to be able to step in and stabilize the market and provide liquidity.
Elsewhere in Washington, before the House Subcommittee on Oversight and Investigations, Kenneth M. Donohue, HUD's inspector general, testified that the growth in the FHA program is making it a challenge to weed out potential bad actors. In his testimony, Donohue said the volume of single-family FHA insured loans tripled in fiscal year 2008. He said it went from $59 billion in loans in fiscal year 2007 to more than $180 billion in fiscal year 2008.
The more recent numbers show the tsunami is continuing. Donohue said...