FHA to Tighten Lending Standards as Defaults Rise

On the heels of our report detailing short-sale flipping and other kinds of mortgage fraud that are on the rise, the Federal Housing Administration plans to announce it will tighten lending standards to try to stem rising defaults. The Washington Post reports Housing and Urban Development Secretary Shaun Donovan will tell the House Financial Services Committee that the agency wants to increase the up-front cash paid by borrowers, raise minimum credit scores for borrowers, and limit how much money sellers can kick in, including paying closing costs or giving free upgrades.

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