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Home loan defaults causing problems for FHAThe Wall Street Journal reports that the FHA might be forced to ask for funds or increase premiums in order to offset its losses as a growing number of people are delinquent or default on home loans which are guaranteed by the agency. Although many industry analysts believe FHA loans have helped stabilize the troubled housing market, the Journal reports that some believe a decrease in reserves for the FHA may cause the agency to cut down on lending, which could create a ripple effect in the market. A report last month from the Mortgage Bankers Association found that the number of FHA home loans that fell into foreclosure set a record in the second quarter of the year, said MBA chief economist Jay Brinkmann. "The percentage of loans with foreclosures started, the percentage of loans in foreclosure and the percentage of loans 90 days or more past due are all records for FHA," he said. In addition, the delinquency rate for FHA loans increased from 13.84 percent in the first quarter to 14.42 percent during the second quarter of 2009, according to the MBA.
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