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. housing finance agency (HFA) loans and prime loans in the states where HFAs operate performed virtually the same in the second quarter of 2012, according to a report published today on RatingsDirect on the Global Credit Portal.

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

"The stable loan performance, strong loan insurance, and robust reserve position of U.S. HFA portfolios lead us to believe that the increase in delinquency will not affect the ratings on HFA bonds unless combined with other factors," said Standard & Poor's credit analyst Lawrence Witte.


-- USPF Criteria: Single-Family Whole Loan Programs, June 14, 2007