Subject: File No. DF - Other Initiatives
From: S. Gregory Lipton, Ph.D
Affiliation: Researcher

July 31, 2011

I am writing in support of lending criteria for low risk loans need 20 percent down. As a consultant to the Office of Economic Affairs at HUD in 1985 I conducted a study of the factors affecting FHA defaults. The strongest predictor of defaults was Loan to Value ration. If the borrower had very little equity, the likelihood of default was higher than if the borrower had more equity. The was true regardless of the race of the borrower or economic conditions of the are the borrower lived.