WSJ: FHA Loans Set Record in June

• July 21st 2009

by Mark Wellborn

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To say that the U.S. is making some noise as a mortgage lender would be a slight understatement. The Wall Street Journal’s Developments blog is reporting that the FHA guaranteed almost 186,000 mortgages in June, a monthly record for the agency in its 75-year history.

The total number of loans last month surpasses the previous record of 157,000 last October.

The Journal notes that the bustling loan activity is keeping Ginnie Mae, which generates mortgage-backed securities for loans backed by the FHA, very busy. Having never crossed the $40 billion threshold in a month’s span, the mortgage association issued $43.5 billion in mortgage-backed securities in June.

These recent developments may look positive, but as the Journal notes, they could be an unfortunate harbinger for taxpayers.

“FHA loans have grown in popularity over the year because it remains one of the only sources of low down payment mortgages. But critics of the agency worry that it hasn’t ramped up its risk-management capabilities and that it could saddle taxpayers with the bill for bad loans. The number of seriously delinquent loans backed by the FHA rose in May to 7.42% from 6.47% one year ago.”

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/wsj_fha_loans_set_record_in_june/1154.