June 20th, 2008
Texas Leads Nation In Fha-Backed Home Loans
With the shakeout in the mortgage industry, federally backed FHA loans have dramatically increased in volume.
These mortgages provide consumers with long-term, fixed-rate financing insured by the government.
FHA market share has jumped from about 3 percent in 2005 to about 12 percent.
“Our volume in Texas for the first quarter of calendar year 2008 was up almost 90 percent from the previous one,” Mr. Montgomery said.
“This is the state with the largest FHA volume, which we thought was a pretty amazing statistic.”
He was in Dallas to tour Bank of America’s regional government lending center.
“I certainly see that the FHA market is going to be strong for 18 to 24 months,” said Allen Jones, who heads the bank’s government lending program.
Bank of America early this year converted a wholesale loan operation it had in downtown Dallas into the FHA-VA loan-processing center.
Dallas was chosen because the bank identified Texas as a key market for FHA-VA lending, Mr. Jones said
“I don’t see it getting dramatically worse, but I still think it’s 2009 or maybe 2010 before you see it mostly stable,” he said. “In Texas and parts of the South, you are seeing things start to get a little better.”
As much as 45 percent of the loans the FHA insures are people refinancing from mortgages – including subprime loans with rising interest rates, causing the payments to increase.
“FHA has been there for them and softening the crash,” Mr. Montgomery said. “Unfortunately, we are not going to be able to save everyone.
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