Commish: FHA Still a 'Stable Force'

During the current instability in the subprime market, the Federal Housing Administration program has remained a stable force, Federal Housing Commissioner Brian Montgomery told a panel on the future of the subprime market at the Mortgage Bankers Association annual convention in Boston.Loans being made through the FHASecure initiative, he said, are performing very well, better even than its purchase business. The program will serve some 80,000 borrowers who are in default on their current mortgages as well as 160,000 who are not in default. Regarding FHA reform, Mr. Montgomery addressed the risk-based pricing portion of the proposal, noting that it would allow the FHA to expand its services to borrowers who have a weaker credit profile. As a result, those with better credit will not have to subsidize those with weaker credit. Risk-based pricing will allow more families to qualify for FHA-insured loans and qualify easier.