GOP presidential candidate Mitt Romney was overheard this week saying that if elected he might eliminate the Department of Housing and Urban Development, which oversees the popular FHA program.
According to combined press reports, Romney said he might seek to abolish HUD but has provided little in the way of details.
The Federal Housing Administration insures roughly $1 trillion in mortgage debt, or 11% of the all outstanding home loans in the U.S.
HUD oversees both FHA and the Government National Mortgage Association.
FHA loans are popular among first-time home buyers because of the low downpayment option.
FHA’s cash reserves are in danger of going negative, but GNMA is hugely profitable. Ginnie Mae reported a $1.2 billion profit from its secondary market operations in fiscal year 2011 — up 84% from FY 2010. Its performance benefitted from lower loss provisioning.
