FHA Defaults hit 9% 
The latest numbers from the Federal Housing Administration (FHA) show that the percentage of loans it backs that are at least 90 days past due hit 9.12% at the end of 2009. That figure is up from 6.82% one year earlier - a 34% increase. FHA officials have repeatedly cited a rise in loan defaults as inevitable given the agency's exponential growth in market share. The FHA currently backs about 30 percent of all new loans for home purchases and 20 percent of refinanced loans. Those figures represent an increase of nearly 1,000 percent since 2006, when private lenders began to pull back and the credit crunch set in. According to the agency, the bulk of its problem loans stem from originations made in 2007 and 2008.
Officials say tighter underwriting standards make more recent and new loans less likely to default. In fact, HUD said in its fiscal year 2011 budget that it expects new business from FHA to generate a $6 billion overall profit, although that number will be eclipsed by projected losses of $19 billion from insuring soured loans. In the fourth quarter of 2009, lenders originated $86.1 billion in FHA single-family loans, up 21 percent compared to the same period in 2008. Sixty percent, or $51.8 billion, of the fourth-quarter financing was used to fund home purchases. For the full 2009 year, FHA insured 5.8 million loans, with an aggregate balance of $752.6 billion - a 24 percent increase compared to 2008's business.
