Guide to Single Family Home Mortgage Insurance PDF Download
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Author:
Publisher:
ISBN:
Category : Homeowner's insurance
Languages : en
Pages : 32
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Book Description
Author:
Publisher:
ISBN:
Category : Homeowner's insurance
Languages : en
Pages : 32
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Book Description
Author:
Publisher:
ISBN:
Category : Home ownership
Languages : en
Pages : 32
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Book Description
Author: Katie Jones
Publisher: Createspace Independent Pub
ISBN: 9781481923477
Category : Business & Economics
Languages : en
Pages : 48
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Book Description
The Federal Housing Administration (FHA) insures home mortgages made by private lenders against the possibility of borrower default. If the borrower does not repay the mortgage, FHA pays the lender the remaining principal amount owed. By insuring lenders against the possibility of borrower default, FHA is intended to expand access to mortgage credit to households, such as those with smaller down payments or below-average credit histories, who might not otherwise be able to obtain a mortgage at an affordable interest rate or at all. FHA also traditionally plays a countercyclical role in the mortgage market. In other words, it generally insures more mortgages during periods when lenders and private mortgage insurers tighten their lending standards and reduce activity in response to market conditions, and it generally insures fewer mortgages at times when lenders and private mortgage insurers make mortgage credit more easily available. When an FHA-insured mortgage goes to foreclosure, the lender files a claim with FHA for the remaining amount owed on the mortgage. Claims on FHA-insured loans have traditionally been paid out of an account, known as the Mutual Mortgage Insurance Fund (MMI Fund), that is funded through fees paid by borrowers, rather than through appropriations. However, if FHA were ever unable to pay claims that it owed, it can draw on permanent and indefinite budget authority with the U.S. Treasury to pay those claims without additional congressional action. In recent years, increased default and foreclosure rates, as well as economic factors such as falling house prices, have contributed to an increase in expected losses on FHA-insured loans. This increase in expected losses has put pressure on the MMI Fund and reduced the amount of resources that FHA has on hand to pay for additional, unexpected future losses. This has led to concern that FHA may need to draw on its permanent and indefinite budget authority for funds from Treasury to hold in reserve to pay for these higher expected future losses, or, eventually, to pay insurance claims. An annual actuarial review of the MMI Fund released in November 2012 showed that, according to current estimates, FHA does not currently have enough funds on hand to cover all of its expected future losses on the loans that it currently insures. The results of this actuarial review heightened concerns that FHA could need funds from Treasury. However, whether FHA actually needs to draw funds from Treasury would be determined as part of the annual budget process, not by the actuarial review. FHA faces an inherent tension between protecting its financial health and fulfilling its mission of expanding access to mortgage credit. In addition, the share of mortgages insured by FHA has increased in the past several years as the availability of mortgage credit has tightened, further contributing to this tension. FHA has recently proposed or implemented a number of changes to its single-family mortgage insurance program that are intended to minimize risk to the MMI Fund while still allowing FHA to support the mortgage market and expand access to affordable mortgages. These changes have included increasing the fees that it charges to borrowers for insurance, modifying its underwriting criteria, and taking steps to increase oversight of lenders who make FHA-insured loans. While many of these changes were made administratively by FHA, some involved congressional action. Congress has also weighed additional changes to FHA's programs, and has considered additional legislation aimed at protecting the financial health of the MMI Fund. An example of such a bill is the FHA Emergency Fiscal Solvency Act of 2012 (H.R. 4264), which passed the House of Representatives during the 112th Congress. An identical bill (S. 3678) has been introduced in the Senate.
Author: Congressional Research Service
Publisher: CreateSpace
ISBN: 9781507868355
Category : Business & Economics
Languages : en
Pages : 26
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Book Description
The Federal Housing Administration (FHA), an agency of the Department of Housing and Urban Development (HUD), insures private mortgage lenders against losses on eligible mortgages. If a borrower defaults on an FHA-insured mortgage, FHA will repay the lender the remaining amount owed. FHA insurance is intended to encourage lenders to offer mortgages to households who might otherwise have difficulty obtaining a loan at an affordable interest rate, such as households with small down payments. Borrowers pay fees, called premiums, in exchange for the insurance, and these fees are supposed to pay for the costs of any mortgage defaults. In recent years, increasing foreclosure rates and falling house prices have strained FHA's single-family mortgage insurance fund, the Mutual Mortgage Insurance Fund (MMI Fund). At the end of FY2013, FHA received $1.7 billion from Treasury to ensure that it had sufficient funds to cover all of its expected future losses on the mortgages that it was currently insuring. This was the first time that FHA had ever required funds from Treasury for this purpose for its single-family program. In response to concerns about the financial condition of the MMI Fund, FHA has taken a number of steps in recent years to attempt to improve its financial position. These changes have included increasing the fees that it charges to borrowers, adjusting its underwriting standards, and making changes to the way that it manages delinquent mortgages and foreclosed properties. FHA has also requested additional authorities from Congress, such as improving its ability to hold FHA-approved lenders accountable for the mortgages they submit for FHA insurance. These authorities have been included in legislation that Congress has considered but have not been enacted to date. Congress has also been considering additional reforms to FHA. Proposed reforms include increasing the amount of capital that FHA is required to hold in reserve to pay for unexpected increases in future losses and specifying actions that FHA must take if its capital reserves fall below certain thresholds. Some of these proposed additional reforms have been included in several stand-alone bills that have been introduced in recent Congresses, including H.R. 1145 and S. 1376 in the 113th Congress. Additionally, reforms to FHA are being considered in the context of broader reforms to the housing finance system. One housing finance reform bill in the 113th Congress, the Protecting American Taxpayers and Homeowners (PATH) Act (H.R. 2767), would have made more far-reaching changes to FHA than those that have been included in other bills. These changes would have included limiting FHA-insured mortgages to only low- and moderate-income borrowers and first-time homebuyers in most circumstances, reducing the share of a mortgage that FHA can insure, and requiring greater risk-sharing with the private sector. The PATH Act would also have removed FHA from HUD and made it an independent agency.
Author: Katie Jones (Analyst in housing policy)
Publisher:
ISBN:
Category : Foreclosure
Languages : en
Pages : 41
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Book Description
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 72
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Book Description
Author: United States. Congress. House. Committee on Government Operations. Employment and Housing Subcommittee
Publisher:
ISBN:
Category : Housing policy
Languages : en
Pages : 72
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Book Description
Author: United States. Department of Housing and Urban Development
Publisher:
ISBN:
Category : Mortgage loans
Languages : en
Pages : 36
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Book Description
Author: Brian Greul
Publisher:
ISBN: 9781954285330
Category :
Languages : en
Pages : 1036
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Book Description
The Doing Business with FHA section in this FHA Single Family Housing Policy Handbook (SF Handbook) covers Federal Housing Administration (FHA) approval and eligibility requirements for both Title I lenders and Title II Mortgagees, as well as other FHA program participants. The term "Mortgagee" is used throughout for all types of FHA approval (both Title II Mortgagees and Title I lenders) and the term "Mortgage" is used for all products (both Title II Mortgages and Title I loans), unless otherwise specified.
Author: U S Government Accountability Office (G
Publisher: BiblioGov
ISBN: 9781289029074
Category :
Languages : en
Pages : 44
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Book Description
Pursuant to a congressional request, GAO reviewed the actuarial soundness of the Federal Housing Administration's (FHA) Mutual Mortgage Insurance Fund, focusing on the: (1) fund's economic net worth as of the end of fiscal years 1992 and 1993; and (2) econometric and cash flow modeling approach used to estimate the fund's net worth. GAO found that: (1) the fund's economic value has improved in recent years and the fund is accumulating sufficient capital reserves to be actuarially sound under the law; (2) at the end of fiscal year (FY) 1993, the fund had an estimated economic net worth of $4.9 billion and a capital ratio of 1.83 percent under the baseline GAO scenario; (3) at the end of fiscal year 1992, the fund's estimated net worth was $600 million and its capital ratio was 0.21 percent; (4) although legislative and other changes to the FHA single-family mortgage insurance program helped restore the fund's financial health, favorable economic conditions in 1993 were primarily responsible for the improvement; (5) the fund fell below the mandated capital ratio of 1.25 percent in FY 1992, but exceeded the ratio in FY 1993; (6) econometric and cash flow models of the FHA single-family mortgage program were used to estimate the economic net worth of FHA loans; (7) the econometric model estimated the historical relationships between the probability of loan foreclosures and prepayments and key explanatory factors such as the borrower's equity and interest rates; (8) the cash flow model measured five primary sources and uses of cash for loans originated in fiscal years 1975 through 1993; and (9) the fund's ability to maintain its financial health and to meet and maintain mandated reserve levels depends on many economic and program-related factors.
