FHA Commissioner Asks Congress For Wider Authority To Push Fraudulent Mortgages Back To Banks
Congress should give the Federal Housing Administration more power to adjust fees and recoup losses on bad loans, Commissioner David Stevens said.
In testimony prepared for a hearing of the House Financial Services Committee today, Stevens said the FHA currently has authority to go after some large-volume lenders to recoup losses on loans that were fraudulently or improperly originated. That power should be extended to all mortgages the agency insures, Stevens said.
The FHA, which now insures more than a third of new mortgages, won congressional approval last year to raise premiums as its mortgage insurance reserves fell to their lowest level on record. Loans the agency insured before 2009 account for 70 percent of its projected losses on single-family mortgages. The quality of loans the FHA is now insuring has improved, Stevens said. FHA’s seasonally adjusted 90-day delinquency rate was 5.8 percent in December, compared with 7.45 percent a year earlier, he said.
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Feb 18, 2011 at 12:57 AM
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