The Federal Housing Administration is planning a "major" advertising campaign in "selected markets" where the agency believes mortgage brokers may be guiding homebuyers to more expensive nonprime loans.The campaign is said to be an effort to secure a better deal for borrowers, but it also could help shore up the sagging government-insured mortgage program. Once the first choice of borrowers who don't measure up to conventional loan standards, the FHA is now often the last option suggested by lenders. In the second half of 2004, government mortgages (including those guaranteed by the Department of Veterans Affairs) accounted for just 5% of all originations, according to the latest figures from the Mortgage Bankers Association. The FHA hopes to win over borrowers by stressing that "our rates are much lower than subprime and only slightly higher than conventional," Vance Morris, director of single-family program development, said at the National Association of Realtors' annual Midyear Legislative Meetings in Washington. Mr. Morris said ads will also emphasize that consumers can be assured of getting "an honest appraisal" with a government-insured loan, and that if they get into trouble, "we will work with you to keep you in your home."

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