(RECAP: Banks’ share of FHA lending, which is designed to help low- to moderate-income buyers achieve homeownership, has been on the decline for the last three years, falling from 60 percent down to 22 percent, according to analysis from Laurie Goodman and Jim Parrott of the Urban Institute’s Housing Finance Policy Center. Many banks are hesitant to take on FHA-insured mortgage loans because of, one, delinquent FHA loans are costly to service, and two, the lenders don’t want to be sued under some part of the Fake Claims Act. JPMorgan Chase largely withdrew from originating FHA loans in late 2015, citing the burdensome regulatory environment and the constant threat of litigation. What can be done to improve FHA lending by banks? Goodman and Parrott suggest that Ben Carson, or whomever is confirmed to be the new HUD Secretary, can start by removing the uncertainty around the Fake Claims Act.)

Powered by WPeMatico