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MBA Chairman Debra Still Reacts to FHA Actuarial Report

WASHINGTON, D.C. – November 16, 2012 – (RealEstateRama) — Debra W. Still, CMB, Chairman of the Mortgage Bankers Association (MBA), issued the following statement today reacting to the release of the Federal Housing Administration’s (FHA) actuarial report on the Mutual Mortgage Insurance (MMI) Fund for single family programs (which differs from the GI/SRI fund that supports FHA’s multifamily programs).

“While everyone had hoped for a better report, the news that the Fund has gone negative is not wholly unexpected, as last year’s report predicted there was a 50 percent likelihood this would occur. The characteristics and stresses on FHA’s pre-2010 books of business continue to be the source of losses, while books from 2010 onward are performing well.

“The good news is that the steps that FHA has taken to better manage its risk in recent years have succeeded in vastly improving loan performance on more recent vintages. The industry welcomed many of those changes and believes that policymakers can take further steps that would stabilize FHA single family programs, starting with a rigorous look at the data driving the actuarial results and an open, robust discussion over the future of the government’s role in housing finance.

“Additionally, ensuring the right balance in the forthcoming rulemakings under Dodd Frank, like the Ability to Repay/Qualified Mortgage (QM) and Risk Retention/Qualified Residential Mortgage (QRM) regulations is also important. For example, a final QM rule could drive an even higher share of the single family market to FHA if it is not carefully crafted to protect consumers while ensuring the availability of credit from private sources. More broadly, the best medicine for FHA is a steadily growing housing market with stable home price appreciation, a less likely outcome if the rules cause lenders to increase cost or tighten qualification requirements for borrowers.

“Today, FHA plays a critical role in the housing market, as the nearly sole provider of credit for qualified first-time home buyers who don’t have twenty percent to put down on a home. These buyers are a necessary support for the housing market. While there is near-unanimous agreement that FHA’s role in the single family housing market today is too large, we must remember that the housing market would be far worse off, today and in the future, without FHA. For that reason, MBA stands ready to work with policymakers to consider appropriate reforms in a measured and methodical way in order to protect the MMI fund and enable FHA to continue to perform its mission in the single family market.”


The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site:

John Mechem (202) 557-2924