At least one national group expects the FHA to become a savior for people struggling with the continuing subprime crisis.
The National Association of Mortgage Processors, or NAMP, recently predicted that the FHA and its loans will take over for subprime mortgages. About one in five people who obtained subprime mortgages in the last two years will wind up in foreclosure, according to the Center for Responsible Lending, a nonprofit advocacy group.
More than a half-million borrowers have lost their homes in the subprime market, and industry experts project that another 2 million or so are likely to meet a similar fate as the subprime crisis spirals.
But the NAMP believes FHA loans can help stop the bleeding.
"As the government's largest mortgage program, the Federal Housing Administration loan has been basically a low-down payment source for first-time home buyers with issues with their credit, but who could fully document their income and assets," the NAMP said in a statement.
In addition, a proposed overhaul of the FHA could make government-backed loans every more tenable for homeowners. To learn more about FHA loans and how to take advantage, contact one of our loan specialists today.