Federal Housing Administration redt huizenmarkt USA

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Het ziet er naar uit dat de FHA uiteindelijk het werk van de banken
doet.
De banken geven onvoldoende krediet om de huizenmarkt op gang te brengen
én houden.

De FHA is hier ingesprongen en heeft daarbovenop óók nog de eisen voor
leningen verscherpt (creditscore van 633 gemiddeld, naar 693 nu, én full
documentation voor leningen).

Al doende hebben ze het laatste jaar $360 miljard leningen verstrekt,
genoeg voor 1.675.000 huizen tegen de gemiddelde prijs.

Groet / Cees

PS. Een interessante pagina
http://www.calculatedriskblog.com/2009/11/housing-starts-and-unemployment-rate.html
Hierin staat ook een verwijzing naar een vorige pagina die een rapport
Housing is the Business Cycle bevat. Pagina 7 en 38 e.v. zijn
verhelderend.

http://www.nytimes.com/2009/11/13/business/economy/13fha.html
November 13, 2009
Housing Agency’s Cash Reserves Down Sharply
By DAVID STREITFELD
The Federal Housing Administration, the government agency whose
loan-insurance programs have become a crucial source of support for the
housing market, said on Thursday that its cash reserves had dwindled
significantly in the last year as more borrowers defaulted on their
mortgages.

The agency released an audit that spelled out the rapid deterioration of
its finances. It is tightening loan standards in hopes it will not
become another drain on the United States Treasury, but is reluctant to
clamp down so much that it snuffs out the tentative recovery in
housing.

How successfully the agency walks this tightrope could well determine
whether the recovery gathers force, or whether home prices slide again —
perhaps creating a fresh economic downturn.

As recently as a few weeks ago, the F.H.A. had said that even under the
bleakest economic forecast, its cash cushion would quickly recover. On
Thursday, it abandoned that position.

“There is a real risk. Nobody has a crystal ball,” Shaun Donovan,
secretary of housing and urban development, said in an interview. “We
recognize there is a possibility that the reserves go below zero and
stay there.”

Still, Mr. Donovan stressed that the agency, which had a role in one out
of five home purchases in the last year, would not need a direct
taxpayer bailout.

“There is no extraordinary action that Congress or anyone else needs to
take,” he said during a news conference in Washington.

Instead, the agency would borrow from the Treasury, under authority
previously granted by Congress. In the worst case, involving a
protracted recession, the audit said the F.H.A. would run out of capital
in 2011 and have to borrow $1.6 billion from the Treasury to pay
insurance claims, a relatively small sum.

That is not a situation the agency considers likely. In line with many
analysts, the agency expects the housing market to turn down again over
the next nine months and then to recover. Under this projection,
foreclosures would be manageable and the reserves would quickly grow.

The F.H.A.’s annual audit was scheduled for release last week, but was
mysteriously delayed at the last minute. On Thursday, as it released the
document, the agency explained that it wanted its auditors to include
more negative forecasts as a way of understanding the worst-case risk.

The audit showed reserves to be 0.53 percent of the total portfolio, far
below the 2 percent minimum mandated by Congress and far less than the
audit last year had forecast. In 2007, just before housing prices began
their worst slump in decades, the reserves were above 6 percent.

Ann Schnare, a consultant who has analyzed the F.H.A. balance sheet, put
the situation this way: “They’re running on empty.”

As the fortunes of the F.H.A. have deteriorated over the last few
months, the agency has become a focal point for dissatisfaction over
federal efforts to prop up the housing market.

It is drawing comparisons to Fannie Mae and Freddie Mac, the giant
agencies created by Congress to keep the mortgage market supplied with
cash by buying up pools of home loans. With borrowers defaulting in the
downturn, Fannie and Freddie have required enormous bailouts.

The F.H.A.’s role differs from that of Fannie and Freddie. Through its
insurance, it helps marginal buyers get loans if they do not have the 20
percent down payment a traditional bank loan requires. The agency
requires a 3.5 percent down payment. Critics say it went overboard and
insured too many loans to unqualified borrowers in 2007 and 2008, a
position with which the agency itself now agrees.

Nearly one in five loans it insured in 2007 falls into the category of
“seriously delinquent,” it said Thursday. These loanholders are at least
three months behind in their payments. For 2008 loans, 12 percent of
them were seriously delinquent.

The F.H.A. says it is insuring loans to more financially secure buyers
with higher credit scores. The average credit score of new borrowers, it
said, is 693, compared with 633 two years ago.

In a sense, the agency is bulking up and giving as many loans as it can
to qualified buyers as a way to diminish the relative size of the pool
of problem loans. It guaranteed more than $360 billion in mortgages in
the last year, four times the amount of 2007.

Critics say this is only increasing the size of the ultimate peril.

“They keep saying they’re going to outrun their problems, but some way,
somehow, the taxpayer is going to end up on the hook,” said Edward
Pinto, a former executive with Fannie Mae.

During the news conference, Secretary Donovan and the agency’s
commissioner, David H. Stevens, said that the cash reserve, the figure
that has fallen to 0.53 percent of loans outstanding, was merely a
supplement to a much larger fund that the F.H.A. was holding against
expected losses. Between the two accounts, the agency has $31 billion to
cover losses over the next 30 years.

The F.H.A.’s problems stem from its rapid transition from a wallflower
to the most popular student in class.

During the housing boom, buyers flocked to private subprime lenders, who
offered deals that required no money down and no documentation. The
F.H.A., which required its token down payment and documentation of the
borrower’s earning power, lost ground.

But as the market tumbled and the subprime outfits failed, F.H.A. loans
became the next best thing. Brian Montgomery, who ran the F.H.A. for the
Bush administration, said in a recent interview that the agency felt it
had no choice but to open the doors to a broader group of applicants.

Citing pressure from Congress and the White House, Mr. Montgomery said:
“We had to let these loans through.”

Mr. Montgomery, now a consultant, says that anyone dismayed by the
possibility of yet another bailout should feel a different emotion
toward the Department of Housing and Urban Development and, for that
matter, himself: gratitude.

“They should be going over to the H.U.D. building and frankly thanking
the career staff for saving them from a depression,” Mr. Montgomery
said.

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