MBA Testimony to Financial Services Subcommittee: Steps to Strengthen FHA

17 Apr

On April 10, David H. Stevens, President and CEO of the Mortgage Bankers Association, testified before a House of Representatives’ Financial Services Subcommittee.  Mr. Stevens’ oral testimony was released by the MBA to its members.

Stevens highlighted the steps that FHA has implemented to address losses in its single-family portfolio, like raising insurance premiums and increasing down payment requirements.  He lauds FHA as “moving swiftly to protect taxpayers and the (MMI) fund,” while citing rising FHA average credit scores.  Stevens then outlines three priorities MBA identifies as necessary in future programmatic changes within FHA:

  1. Restoring financial solvency
  2. Preserving FHA’s critical housing mission
  3. Maintaining FHA’s countercyclical role.

Stevens also listed “a number of steps to further strengthen FHA and promote the return of private capital,’ such as lowering loan limits that were necessary at the height of the housing crisis and adjusting down payment requirements to mitigate risk factors like low credit scores.  He stressed the need to find the right balance of credit controls to offset risk.

Warnings abounded in regards to the restrictive influence of the fear of risk and subsequent attempts to reign it in. He paints the road to homeownership as wrought with challenges and says, “there may be families with good credit willing to put down substantial down payments that are being frozen out of the market because the risks of making any mistake are too great – and the rules of the road are unclear – and often contradictory.”  He warned of unrealistic requirements allowing only people with perfect credit to benefit from FHA’s programs, which would limit options for FHA’s actual target population.

The crux of Stevens’ statement was the need to clear up uncertainty in our real estate finance system. He added, “that includes not just FHA, but also examining the future of the entire housing finance system.”

Read the complete testimony here:

http://mba.informz.net/z/cjUucD9taT0yMjYzNTQ3JnA9MSZ1PTAmbGk9MTE0NTczNzQ/index.html

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: