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Volume 11 - Number 9

May 4, 2018

Acting FHA Chief Says ‘Disturbing’ Trends Threaten MMIF’s Health

Acting FHA Commissioner Dana Wade voiced concern over increasing shares of FHA-insured loans with high debt-to-income ratios, cash-out refinances and purchase loans with downpayment assistance. Testifying recently before the House Appropriations Committee on the agencyís FY 2019 budget, Wade warned that such disturbing trends suggest that FHAís exposure to loss could rise and put the Mutual Mortgage Insurance Fund and taxpayers at risk. Wade said FHAís financial health and the impact of the volatile reverse mortgage portfolio are a continuing concerns. Last year, the fundís economic net worth declined by $1.9 billion and the capital reserve ratio fell to 2.09 percent from 2.35 percent the previous year due to losses associated with Home Equity Conversion Mortgage loans. Wade noted an increase in the proportion of borrowers with DTI ratios in excess of 50 percent. In February, the ...

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