FHA Chief Says Insurer's Market Share Could Rise to 30%

The Federal Housing Administration is playing a larger role in the origination market and could end the year with a 30% market share, according to FHA commissioner David Stevens. FHA currently has a 23% market share, he said, and is no longer just a "countercyclical agency." FHA has become a "significant source of primary capital to fund the needs of homeownership," Mr. Stevens told a National Association of Federal Credit Unions conference. Meanwhile, the origination of mortgages has become very concentrated among several large banks, he said. He encouraged credit union executives to become more involved in mortgage lending to serve their members. He noted that FHA is increasing its net worth requirements, tightening credit standards, and taking other steps to control risks, such as hiring FHA's first credit risk officer. "FHA will never be able to fulfill its mission long-term or short-term if it is under scrutiny for not being well managed from a risk management standpoint," he said. The CRO candidate has already been picked and should be on board by year-end, he added.