The Department of Housing and Urban Development has lined up another team of financial analysts to provide the agency and Congress with a second opinion on the financial health of the FHA Mutual Mortgage Insurance Fund.
Every November, the Federal Housing Administration provides Congress with an actuarial report that estimates the economic value of the FHA single-family loan portfolio.
The fiscal year 2012 actuarial report prepared by the Integrated Financial Engineering Group showed the FHA fund had a negative economic value of $16.3 billion and a negative 1.44% capital reserve ratio.
House Financial Services Committee chairman Jeb Hensarling, R-Texas, said the FY 2012 report showed the FHA fund is “bailout broke.”
FHA officials are hoping the FY 2013 actuarial report released by IFEG this fall will show a vast improvement in FHA’s finances.
But just to be sure Congress will be able to see the improvement, FHA has hired Summit Consulting LLC and Milliman Inc. to produce a second actuarial report.
“This second assessment will provide another view of the health of the MMI Fund, giving HUD a new independent analysis and a second actuarial model,” said HUD deputy assistant secretary Frank Vetrano.
The HUD official revealed the hiring of the new team in a FHA quarterly report to Congress that was delivered on Friday.
“I believe that a second independent view of the fund’s expected value will provide valuable insights and look forward to making these findings available to you later this year,” Vetrano said.