FHA Loan: Needs More Bailout Money

There was something news worthy in the Mortgage Applications’ weekly survey. In this survey, it is said that more than three percent of mortgage loans. In the survey, it can clearly be seen that mortgages have been going down right now. It seems that not many people are applying for FHA loans even with the fact that the interest rates have been more affordable this week. Also, what is noteworthy in the findings is that FHA loans have been static right now. Last month, FHA loans shot up to more than forty percent, a record high since a couple of decades ago.

An FHA loan, contrary to what some people might think, is not a government funded loan. These are simply government insured loan mortgages. If the homeowner chooses to default, the government agrees to pay for the loan. The Federal Housing Administration or FHA is the organization that authorizes private loaners to have these kinds of government insured loans. There are a lot of people out there that does not want to avail ordinary loans because of the high interest rates and the unreachable credit requirements. The FHA approved loans is an alternative to these people since almost anyone can qualify even if one’s credit history is not so good right now.

According to studies and economic surveys, reports say that the FHA might have to get a some bailout money since an alarming amount of borrowers with FHA loan mortgages all owe a lot more than the real value of their mortgaged property. There should be, at the very least, two percent of the insured FHA loan on the funding reserves of the FHA. Last year, the number is down to three percent. Though the current numbers are still to be released, we are not expecting for an increase.