December 5, 2011
FHA Programs (Federal Housing Administration)
Government - Sponsored Enterprises
NAR President Veissi Testifies on FHA
NAR President Moe Veissi last week testified before the House Financial Services Committee on the important role of FHA in the marketplace. The hearing, on the health of the FHA fund, followed publication of the FY11 actuarial review, which showed FHA's total cash reserves increased by $400 million over last year for a total reserves of $33.7 billion. The excess reserves remain below the Congressionally mandated 2% ratio, which has caused some Member of Congress to express concern, but the audit expects them to return to that level by FY14.
President Veissi spoke of the important role that FHA plays in the marketplace and the need to continue to strengthen the program to ensure that safe, affordable mortgage financing is available to qualified home buyers.
FHFA Releases Summary of REO Responses
On November 30, 2011, the Federal Housing Finance Agency (FHFA, the conservator of Fannie Mae and Freddie Mac [the GSEs]) released a summary of the responses received to the Request for Information (RFI) on enhancing Fannie Mae, Freddie Mac, and the Federal Housing Administration’s REO asset disposition strategies announced August 10, 2011. The agency said that most respondents suggested strategies that involved renting of the properties for a period of time and many recommended offering tenants an opportunity to purchase. In a letter sent to FHFA on September 15, 2011, NAR emphasized the need for mortgage financing for qualified purchasers and expansion of resources for loan modification, refinancing and short sale efforts. NAR also encouraged the continued timely and orderly disposition of REO inventory assets through expediting of existing processes. Only in limited geographic areas where alternatives are needed new disposition strategies should rely on the expertise of local businesses including contractors, real estate brokerage firms, and professional property management companies. The agency noted that many nonprofit and trade group respondents stressed the importance of promoting local neighborhood stabilization efforts, knowledge of individual communities, and using community groups’ expertise in any disposition strategy. FHFA said that the responses will inform the scope, magnitude, and policy choices FHFA will consider as they continue to develop initial pilot transactions.