Questions Remain on State of FHA’s Mortgage Insurance Fund

Despite recent statements from two Congressional Budget Office Analysts asserting the Federal Housing Administration’s Mutual Mortgage Insurance Fund has overspent by a measure of $15 billion, questions remain as to the actual losses or gains the agency has encountered over the past two decades. 

Questions around the assumptions on which the CBO based its findings arose late last week, according to a HousingWire report that included a dialogue with FHA on the matter. 

According to the report, FHA indicates the findings are invalid because they do not account for positive movement within the insurance fund in fiscal year 2013, which ended September 30. 

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FHA maintains it has collected premiums in its latest books of business that are already working to offset losses incurred from legacy books of business including loans made during years leading up to the housing crisis. 

The administration has maintained capital reserves based on its 2013 performance, despite a treasury draw that took place in September largely based on losses sustained on reverse mortgage loans made under the Department of Housing and Urban Development’s Home Equity Conversion Mortgage program. 

FHA declined to comment publicly on the issue, but HousingWire reported, “the single-family mortgage guarantee books for 2013 posted $17 billion in net value, which would swing the originally reported $15 billion cost to taxpayers to an actual $2 billion taxpayer savings.”

“If you were to look back at the FHA program over the past 21 years, the agency would have a positive net value versus the negative $15 billion loss reported,” a HUD official told the publication. 

Written by Elizabeth Ecker

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