MBA Statement Regarding FHA's Annual Report to Congress
|Rob Van Raaphorst
|(202) 557- 2799|
WASHINGTON, D.C. (November 15, 2016) - David H. Stevens, CMB, President & CEO Mortgage Bankers Association, issued the following statement regarding FHA's Annual Report to Congress.
"FHA and its leadership should be commended for the steps they have taken to improve the value of the FHA MMI fund for single family mortgages since the economic crisis, at the same time they have provided access to homeownership for hundreds of thousands of low and moderate income Americans. The core strength of FHA's forward book of business is representative of growing stability of the housing market nationally.
"An important subtext to this report is the continued volatility in the HECM book of business, which this year turned negative, dragging down the overall value of the MMIF. Given the importance of FHA to low and moderate income and first time homebuyers, the next administration may want to look at accounting for the two programs individually in order to isolate the critically important forward book from the wild swings of the HECM fund.
"Today's positive report on the state of FHA will most likely renew calls for a reduction in FHA fees. It is a worthwhile conversation, but must caution that today's report again shows the vulnerability to the reserve fund posed by the volatility in the HECM book. Given the HECM volatility and recent concerns about liquidity in the Ginnie Mae market, these discussions should occur with an eye toward long term stability for the FHA program.
"We look forward to working with FHA to evaluate options that balance the need to ensure affordability for FHA borrowers, maintain actuarial soundness, and preserve stability in the Ginnie Mae mortgage backed security and mortgage servicing rights markets."