Abstract of the Week
Posted at 3 p.m. on Nov. 16, 2012
As the housing market continues to drive the economic recovery, the Department of Housing and Urban Development has released its annual report to Congress on the financial status of the Federal Housing Authority’s Mutual Mortgage Insurance (MMI) Fund, which is used to manage the single-family mortgage insurance programs. Those programs make up the lion’s share of FHA’s portfolio.
From the executive summary: “This fiscal year, the Mutual Mortgage Insurance Fund (MMI Fund or Fund) capital reserve ratio fell below zero to negative 1.44 percent. While this one-time valuation of the economic net worth of FHA’s portfolio is obviously of concern, it does not mean that FHA will have to draw from the Treasury.”
“In response to this actuarial review, HUD is announcing a series of changes designed to build on previous steps that have improved the health of the Fund. Throughout this Administration, when FHA’s health has faced challenges, we have taken action to protect the Fund. Indeed, the steps we have taken to date are estimated to have improved the health of the Fund by more than $20 billion. Therefore, FHA is continuing to take additional actions designed to add billions more to the Fund over the coming years.”