iEmergent, a Des Moines, Iowa-based market research, forecasting and advisory services firm, has released its 2009-2013 Federal Housing Administration (FHA) Purchase forecasts, which peg owner-occupied FHA purchase loans in 2009 totaling 1.4 million, equating to a total purchase volume of $245.9 billion.
The iEmergent 2009-2013 forecasts provide lenders with current information about the size and scope of FHA lending opportunities in individual markets nationwide, as well as how these opportunities will be changing over the next five years.
iEmergent says its 2009 FHA forecasts fully consider the impact – both positive and potentially negative – of many significant changes to the FHA lending programs that were implemented in 2008, as well as changes that will occur in 2009. With the inclusion of FHA refinance transactions, iEmergent projects total FHA funding could reach $400 billion for 2009.
"The rapid expansion of FHA loan volumes in the United States has been accompanied by an equally rapid shift in the distribution of FHA lending across local mortgage markets," says Dennis Hedlund, founder and president of iEmergent. "While greater access to the FHA loan program is a positive for borrowers – especially first-time home buyers – its quick expansion and rapidly changing distribution patterns might be cause for alarm to some lenders."
Hedlund adds that the uptick in FHA lending popularity requires prudent oversight efforts, such as "increased FHA training, the close tracking of loan package submission and documentation quality, and the constant evaluation of loan data integrity."
"An increase in early FHA default levels would undoubtedly cause FHA to contract the program at a time when the FHA product is critical to stabilizing struggling housing markets," he says.