In a recent interview with MS-NBC, the Commissioner of the FHA made some very interesting points. A lot of this information is not widely known. Some key points that Mr. Stevens made were as follows:
1. The FHA is not considering going to a minimum credit score formula for qualification at the present
2. The FHA has $ 30 Billion in excess capital to cover risk to their portfolio and although foreclosures are and have been high, the capital in the bank is continuing to exceed the risk (delinquent borrowers). The FHA WILL survive.
3. FHA currently has no intention of going to "Risk Based MIP Premiums). The current rate for most FHA loans is 1.75%. The FHA currently plans to continue the moratorium on raising this with a Risk Based Pricing System (lower credit score, higher premium)
4. The FHA is doing business with high quality borrowers. The average credit score for FHA Borrowers has increased to 690 from 630.
Please click below for the interview. It is very enlightening.