The ""Federal Housing Administration"":http://www.fha.gov (FHA) currently backs about 30 percent of all new loans for home purchases and 20 percent of refinanced loans. The agency's share of the mortgage financing market has increased nearly[IMAGE]1,000 percent since 2006, as private lenders pulled back and the credit crunch set in. And with that exponential leap in the size of the federal agency's portfolio, defaults and foreclosures have also begun to mount.
Real estate experts at the online foreclosure marketplace ""USHUD.com"":http://www.ushud.com predict FHA will continue to dominate the foreclosure landscape, holding title to 49 percent of residential foreclosure properties by 2018.
In the early 1990s, lending institutions were in a race to the bottom, relaxing lending requirements so to compete with FHA as the dominant insurer of mortgages.[COLUMN_BREAK]
According to USHUD.com, a pioneer in innovative and arguably reckless lending practices was the nonprofit Nehemiah Corp., which facilitated down payment assistance ""gifts"" from buyers to sellers for FHA mortgages, resulting in a foreclosure rate 500 percent higher than the traditional FHA mortgage. USHUD.com explained that the federal government banned the practice in 2008, but not until Nehemiah raked in about $200 million in profits and the market was in shambles.
Now, the pendulum is swinging the other way, says Michael Urbanski, CEO of USHUD.com and its parent company Heavy Hammer, Inc.
""Lenders have been badly stung by recent waves of foreclosures and are returning to conservative lending practices,"" Urbanski said. ""FHA is positioned to receive a sharp increase of mortgages, which will result in more FHA foreclosures, though less than when the Nehemiah program was in full swing.""
Headquartered in Annapolis, Maryland, Heavy Hammer, Inc. is an online networking and consulting company advocating for American homebuyers. The company drives a full suite of foreclosure Web sites, offering free lists of foreclosure properties to more than 500,000 homebuyers monthly. Starting with USHUD.com, Heavy Hammer's online marketplace now includes more than 30 state- and region-specific sites.
USHUD.com is a private company not affiliated with or endorsed by the federal government or the U.S. Department of Housing and Urban Development.