February 28, 2013
David H. Stevens, President and CEO of Mortgage Bankers Association, testified before the Senate Committee on Banking, Housing and Urban Affairs on “Addressing FHA’s Financial Condition and Program Challenges.” You can find the full text of his 17 page statement here.
Stevens statement spoke in support of FHA, saying, “MBA firmly believes that FHA has a vital role in the United States’ housing finance system and its mission of serving first-time homebuyers and underserved populations and playing a countercyclical role should continue.” He lauded the appointment of Carole Galante as Commissioner and said that “the changes she has announced to date provide comfort that the agency is moving aggressively and in the right direction.”
The most important statement Stevens made in support of FHA was arguably this: “according to the 2012 Actuarial Review, under the current FHA underwriting standards, every endorsement year from fiscal years 2011 through 2019 is projected to have a cumulative claim rate of less than 5.7%. Prior to the 2011 book, no FHA annual book in more than 30 years had projected claim rates below 5.7%.”
Not only does Stevens and the MBA see FHA as actively and expeditiously rectifying past policy and re-establishing financial solvency, but they see the agency preparing to knock the proverbial financial and housing ball right out of the park on a level that hasn’t even been seen in the last three decades.
Stevens’ statement was full of references to information provided by HUD’s annual report, data MBA compiled from surveys, third-party reviews of many of FHA’s programs and a host of other statistics garnered from studies and assessments. Based on information highlighted by Stevens, he described MBA’s perspective on further programmatic changes at FHA as needing to balance three priorities:
- Restoring financial solvency;
- Preserving the housing mission; and
- Maintaining its countercyclical role.
MBA’s positive review of FHA’s recent changes was a common occurrence, and the association says that it “stands ready to work with this committee as a resource to ensure that the trade-offs associated with these options are fully recognized, appreciated, and seriously considered during any subsequent legislative debate.”
What are your feelings on Stevens’ statement to the senate committee? Let us know in the comments section below.