Study: Federal Housing Authority policies have negative local impact

The American Enterprise Institute, a conservative think tank, recently published a report saying that the Federal Housing Authority's lending practices has led to disproportional foreclosure rates among low and middle-class families throughout the country.

In its report, the AEI chose 10 cities for individual case studies, including Atlanta. Its findings show that the average Atlanta homeowner has seen a 22.1 percent drop in home price index since 2009, while homeowners in lower-income areas have witnessed a 27.2 percent decline. The AEI study says that the FHA's lending polices encourage those with lower credit scores or high debt to make "risky" financial decisions. They also point out that:

In Chicago and Atlanta, the five zip codes with the highest projected foreclosure levels ranged from 35 to 73 percent and 24 to 30 percent, respectively. Contrast this to the five zips in Chicago and Atlanta with the lowest projected foreclosure levels. These ranged from 0 to 4 percent and 2 to 4 percent, respectively.