FHA Lending in 2011
FHA mortgage lending continues to play a major role in home financing and refinancing for the American homeowners. The state of FHA lending remains positive as the loan defaults are declining and interest rates remain more affordable than any other time in deades.
|The Department of Housing and Urban Development spokesman Lemar Wooley said in a recent interview with NPR that FHA paid about $12.8 billion on almost 100,000 such claims on foreclosed homes in 2010. The average FHA mortgage was $128,000 per claim. In 2009 FHA paid on 70,000 claims at an average cost per FHA loan was $117,000 totaling almost $8.2 billion.
Will FHA mortgage loan originations rise in 2011? Most analysts believe that FHA loan originations will decline because rates are predicted to rise. However, the popularity of FHA lending should continue to increase.
It is no secret that FHA home mortgages have become very popular since the mortgage industry crashed in 2006. Since then FHA mortgage lending has increased about 30% of the total mortgage market-share. FHA lending continues to have a lower foreclosure rate than conventional mortgages. At the end of the 3rd quarter of 2010, the foreclosure rate for all home mortgages was 4.39% compared to 3.32% for FHA mortgage loans. FHA rates remain extremely low and the cost for FHA refinancing continues to be less than conventional lending.