My new groundbreaking study out this morning –noted by Gretchen Morgenson of the New York Times– reveals never-before-available data at the zip-code level on projected foreclosure rates for families getting FHA loans nationwide. The results are dramatic: Nationally, there are over 9,000 zip codes with a projected foreclosure rate of 10% or more on FHA-backed loans. On average in these zip codes, 1 in 7 families will likely lose their home to foreclosure.
Federal Housing Administration’s (FHA) current policies are financing failure for working-class families. The terms of the FHA loans are putting families on a tight-rope, where they could be ‘one car repair’ or ‘one lost work shift’ away from losing their home. The combination of low-down payments, poor credit, high debt-to-income ratios, and slow loan amortization sets families up for failure. The resultant foreclosures — along with destroyed credit and loss of the very equity families were working to build — dashes their dream of home ownership.
For more information, please visit www.NightmareatFHA.com for an interactive look at the harm FHA has caused in neighborhoods across the country.