House Financial Services Subcommittee on Housing and Insurance Chairman Rep. Randy Neugebauer (R-Texas) was encouraged by progress outlined in an FHA report on the status of the Mutual Mortgage Insurance Fund on Friday, but he said more improvement is needed.
The MMI Fund’s net worth and capital reserve ratio have both improved; however, the fund’s net worth was negative $1.3 billion, and the capital reserve ratio was negative 0.11 percent, according to FHA’s report.
“I’m pleased to see some signs of recovery at FHA,” Neugebauer said. “But the fact remains that the Fund is still underwater. Just a few months ago, FHA was given a $1.7 billion taxpayer-funded bailout. Without serious reforms, it may require another bailout in the future.”
Neugebauer added that a plan to repair structural flaws with FHA would be needed to keep the program viable.
“I believe that homeownership not only benefits American families, but also our neighborhoods and communities,” Neugebauer said. “So I’d like to see FHA get back on truly sound financial footing. That’s why I co-authored the Protecting American Taxpayers and Homeowners Act. The commonsense reforms in the PATH Act would create a more sustainable, sensible and efficient FHA.”
The PATH Act would implement taxpayer protections, define the FHA’s mission and ensure that the agency complements the private sector rather than competing against it.
“…It ensures that FHA is run as if it were an independent mortgage insurance company, free from political influence and with the ability to be nimble, making real-time business decisions that protect taxpayers,” Neugebauer said.