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Yes, actually not the slump so much (but that is part of it).
The conventional lenders, that use FreddieMac & FannieMae, starting 2 June 08 are limited to a max of a 97% loan. They also have had major rate increases for borrowers with less than 680 scores. Lastly, for borrowers that need to borrow more than 85% of the sales price, the MI/PMI rates have gone up a lot for most FICO ranges. And then for lots of areas of the country - and there are less of them now-the max for loans are 5% less than for non-distressed areas.
FHA has had their arms twisted by government officials to help those in distressed areas. There is no loan limit decreases for those areas and for the borrowers that don't have money for down payment, this is the loan program for them. MI is much less than for conventional loans.
Nice thing is that FHA is profitable I have been told. This means that the UFMIP (Up Front Mortgage Insurance Premium) account for FHA is showing enough excess that they donate it to the Federal Government. On top of that starting 7/14/08 they will be charging a higher rate for borrowers that have a more likelihood of going into foreclosure.
Charles
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