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TEXT-S&P Report: U.S. HFA & Prime Loans Still Comparable In Q2 2012

(The following was released by the rating agency)

SAN FRANCISCO (Standard & Poor's) Oct. 9, 2012--U.S. housingfinance agency (HFA) loans and prime loans in the states whereHFAs operate performed virtually the same in the second quarterof 2012, according to a report published today on RatingsDirecton the Global Credit Portal.

Although HFA delinquency did rise in the second quarter, HFAportfolios have a higher proportion of Federal HousingAdministration loans than state prime mortgage programs do,providing them with stronger security in the event of a loandefault, and HFA parity programs also have substantial equity.The report says that HFA loan performance has been stable forthe past 11 quarters, with delinquency ranging from 6% to 8%.

"The stable loan performance, strong loan insurance, androbust reserve position of U.S. HFA portfolios lead us tobelieve that the increase in delinquency will not affect theratings on HFA bonds unless combined with other factors," saidStandard & Poor's credit analyst Lawrence Witte.

RELATED CRITERIA AND RESEARCH

-- USPF Criteria: Single-Family Whole Loan Programs, June14, 2007

Keywords: MARKETS RATINGS USHFA&PRIMELOANS