The Obama administration's plan to modify 3 million nonprime loans will be a boon for Federal Housing Administration lenders, according to the chief executive of Lenders One, an alliance of 135 mortgage bankers. "FHA will end up with a huge market share of these modified loans," CEO Scott Stern said in an interview with National Mortgage News this week. Several Wall Street firms are using Lenders One to refinance loans that have already been written down in value. Because of the credit scores and loan-to-value ratios, "the refinancing option of choice is FHA," Mr. Stern said. "Servicers like it because you are replacing risky loans with safe FHA loans."
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