The Federal Housing Administration is not immune to the housing recession, but strong contributions for the past two years’ books of business, including an increase in HECM mortgage insurance premiums, are helping to stabilize the Mutual Mortgage Insurance Fund following 2006-2008 losses.
Carol Galante, acting commissioner of the Federal Housing Administration, spoke of the changes made to improve the overall financial health of FHA’s insurance fund in a September 8 hearing before the Committee on House Financial Services Subcommittee on Insurance, Housing and Community Opportunity.
“Our actions to raise single-family insurance premiums three times over the past 16 months plus one large increase for HECM loans are also providing revenues that will substantially offset expected future losses on earlier books,” Galante said. “Credit quality on new endorsements is historically high, so that expected net credit costs on the FY 2010 and FY 2011 book are low while expected premium revenues are very high.”
Further, she expressed concerns about housing counseling funding, including HECM counseling support.
“HUD’s Housing Counseling Program is the only dedicated source of federal funding for the full spectrum of housing counseling services,” Galante said.
In FY 2010, the more than 2,700 HUD- approved counselors throughout the nation provided invaluable counseling services to more than 2.1 million clients who sought education and assistance to make informed housing decisions, she said.
“We are working closely with the House and Senate THUD appropriations subcommittees and greatly appreciate the efforts of Chairman Biggert, Ranking Member Gutierrez, Rep. Velazquez, and others on the Subcommittee to restore funding in the FY 2012 budget.
Written by Elizabeth Ecker