Are We Too Distracted to Send Crooks to Jail?
The Next Hit: Quick Defaults More FHA-Backed Mortgages Go Bad Without a Single Payment
By Dina ElBoghdady and Dan Keating Washington Post Staff Writers Sunday, March 8, 2009; A01
The last time the housing market was this bad, Congress set up the Federal Housing Administration to insure Depression-era mortgages that lenders wouldn't otherwise make.
. . . With the surge in new loans, however, comes a new threat. Many borrowers are defaulting as quickly as they take out the loans. In the past year alone, the number of borrowers who failed to make more than a single payment before defaulting on FHA-backed mortgages has nearly tripled, far outpacing the agency's overall growth in new loans, according to a Washington Post analysis of federal data.
Many industry experts attribute the jump in these instant defaults to factors that include the weak economy, lax scrutiny of prospective borrowers and most notably, foul play among unscrupulous lenders looking to make a quick buck.
If a loan "is going …