What We're Hearing

Ed Pinto, the former Fannie Mae credit officer, is keeping up his assault on the Federal Housing Administration's finances. In a follow-up to his recent Congressional testimony, Mr. Pinto noted that 1.2 million FHA-backed loans that were written from 2005 to 2008 will go into foreclosure. In a new email he says his projection for a 20% overall default rate on the government's $725 billion portfolio is "most reasonable" based on "new information disclosed" by the agency itself. Some lenders have been emailing me, saying that they believe (in time) FHA will have a 50% market share. Right now it's at about 25%. Meanwhile, today on Capital Hill lawmakers are taking up legislation to create the 'Consumer Financial Protection Agency' which will have oversight over mortgage instruments, credit cards (and one would assume) auto loans. See the National Mortgage News website later today for an update...