Adding this one test could cut FHA default rates in half

SOURCE: Mortgage News Feed

Default rates on Federal Housing Administration-backed mortgages originated at the height of the mortgage bubble have risen to 36%, according to a new report from the Urban Institute. Using Corelogic’s Prime Servicing Data and Home Mortgage Disclosure Act data, the Urban Institute calculated the default rates for FHA-backed loans originated in 2001, 2007, 2008, and 2012. For FHA mortgages written in 2001, the default rate is 11%, while the default rate for loans written in 2007 is more than triple that figure, at 36%.

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