MBA Chairman Robbins Testifies in Support of Reform to Reinvigorate FHA

WASHINGTON, DC (March 15, 2007) —  John M. Robbins, CMB, Chairman of the Mortgage Bankers Association (MBA), testified today before the U.S. Senate Appropriations Committee’s Subcommittee on Transportation, Housing and Urban Development and Related Agencies.  The topic of the hearing was “Solvency and Reform Proposals for the Federal Housing Authority.”

“MBA strongly supports FHA and believes that it still plays a critical role in today’s marketplace,” said Mr. Robbins.  “Most of FHA’s business is directed toward low and moderate income and minority borrowers – the very strata that is most challenged to be part of the American Dream.  At the same time, we have watched with concern as FHA has steadily lost market share over the past decade, potentially threatening its long-term ability to help underserved borrowers.”

“FHA has an important role to play in the market expanding affordable homeownership opportunities for the underserved and addressing the homeownership gap,” continued Robbins.  “For low and moderate income families, FHA should be the financing considered first because it has the lowest rate and provides the borrower the best opportunity to become a successful homeowner.”

In order to revitalize FHA, Mr. Robbins called on Congress to pass reforms giving FHA the flexibility to offer innovative new products, invest in new technology and manage their human resources.  Robbins also offered several other proposals. 

“MBA supports changes to FHA’s loan limits, including the elimination of the complicated downpayment formula and providing downpayment flexibility.  The downpayment is one of the primary obstacles for first-time, minority and low-income homebuyers.”

“MBA also supports changes to the Home Equity Conversion Mortgage program.  MBA surveys show that FHA’s HECM product comprises 95 percent of all reverse mortgages and is thus tremendously important for senior homeowners.”   

Robbins’ full testimony can be found at www.mortgagebankers.org.