The FHA foreclosures are likely to be picking up steam.
The authorities must know it too, because now they are doling out the REO listings to the usual suspects, instead of a centralized approach. Back in the day, you had to have a special FHA-REO lockbox key!
These borrowers refinanced their FHA purchase loan two times since buying in 2008 – the latest in May, 2010 – and paid loads of mortgage insurance along the way. Yet by early 2011 they must have given up, and received their first NOD in July of that year – 14 months after the loan’s origination.
Even though they had to qualify for their loan each time, their initial 3.5% investment ($21,525) wasn’t enough to keep them engaged. Add these post-peak newer borrowers to the masses who have procurred the FHA reverse mortgages, and there has to be trouble coming. Luckily, there haven’t been that many FHA loans in the higher-priced areas?