The newly installed Secretary of the Department of Housing and Urban
Development (HUD) released her first quarterly report on the agency to Congress
on Tuesday. A key point regarded the Federal Housing Administration’s Single
Family Mutual Mortgage Insurance (MMI) Fund.
Secretary Marcia L. Fudge said the
fund has remained resilient despite the financial challenges faced by
homeowners with FHA-insured mortgages in 2020 and the agency has no near-term
plans to change MMI’s current premium pricing. She explained that the fund
stands at more than $80 billion, still well above the 2 percent minimum capital
reserve required.

Through the pandemic, the FHA portfolio has experienced increased levels of
seriously delinquent loans and a heightened level of loans in forbearance, but
Fudge said HUD has continued to monitor mortgage performance trends within the
FHA portfolio, particularly related to those homeowners who are struggling
financially because of the pandemic.

The Secretary said, “Tens of millions of families have been devastated by
this pandemic, and housing has been a critical part of how we keep people safe.
The FHA insurance program provides crucial access to credit and homeownership
for first-time homebuyers, low-to-moderate income families, and households of
color who have been historically underserved. We are committed to an equitable
recovery and recognize the unprecedented moment and opportunity for HUD to lead
the way.”

Among steps taken in recent weeks to assist FHA homeowners struggling because
of the pandemic has been an extension of foreclosure and eviction moratoria
through June
, streamlining COVID-19 loss mitigation options, and allowing
longer forbearance for borrowers whose plans were expiring.

The Mortgage
Bankers Association (MBA) issued a statement in response to Secretary Fudge’s
announcement. MBA President and CEO Bob Broeksmit said, “MBA commends Secretary Fudge for maintaining
FHA’s current mortgage insurance premium pricing until we have a clearer
picture of the long-term impact of the pandemic on FHA borrowers and the
insurance fund. While it is desirable to have lower mortgage financing costs,
particularly as rates rise and home prices continue to increase, we agree with
HUD that we need more data about how the more than 1 million FHA loans that are
delinquent perform as they exit COVID-19-related forbearance.”

By Jann Swanson , dated 2021-03-31 11:03:10

Source link

Courtesy of Mortgage News Daily

Leave a Reply