Council Formed to Provide FHA Guidance

October 29, 2009

An executive-level panel has been formed by the Mortgage Bankers Association (MBA to make policy recommendations to help ensure that the Federal Housing Administration (FHA) can continue to fulfill its mission in an evolving mortgage marketplace.

The Council on the Future of FHA (CFF) will be chaired by Daniel Crockett, president, CEO & chairman of Franklin American Mortgage Co. of Franklin, Tenn

“Currently insuring upward of 30 percent of today’s loan volume, the FHA is an indispensible part of today’s mortgage market,” said Robert E. Story Jr., CMB, chairman of the MBA. “Ensuring a strong FHA has long been a top priority for MBA. Lenders need a healthy FHA more than ever if we are going to sustain this housing recovery.”

The FHA has been under close observation recently after announcing a risk that its capital reserves would drop below federally mandated levels; however, FHA Commissioner David Stevens has stated there is no immediate need for a taxpayer bailout to save the agency. Furthermore, Stevens also recently rejected proposed legislation in Congress to up the FHA’s current minimum down-payment requirement from 3.5 percent to 5 percent in an effort reduce risk and bulk up those reserves.

The MBA council will be comprised of a small group of leaders in the mortgage banking industry, with representatives from large and small companies. MBA has also retained the consulting services of the Collingwood Group to assist in the project. Managing directors of the Collingwood Group include former Ginnie Mae president Joe Murin and former FHA Commissioner Brian Montgomery.

Murin stepped down from his position at Ginnie Mae on August 14, after spending 13 months at the helm of the agency and overseeing its exceptional growth, including the issuing of more than $43 billion in mortgage-backed securities in June and nearly $207 billion of liquidity to the secondary market in the first six months of 2009. Montgomery served FHA commissioner from 2005 to 2009 and then was acting HUD secretary in early 2009. He joined HUD from the Executive Office of the President, where he served as deputy assistant to the president and cabinet secretary.

“During the recent run-up in business, the folks at FHA have done an incredible job given the limited resources at their disposal,” Crockett said. “Our members want to help ensure that FHA can effectively manage the risks that come with the increased business the agency is seeing. As a strong advocate of FHA and its mission, MBA wants to take proactive steps to ensure the safety and soundness of the agency today and in the future.”

Members of the Council on the Future of the FHA:

Dan Crockett (chairman), Franklin American Mortgage Co.

Gary Acosta, Prado Mortgage

Les Bedford, Seattle Financial Group

Mark Beisler, Red Mortgage Capital

Clint Bonkowski, Quicken Loans

Phillip W. Bracken, CMB, Wells Fargo Home Mortgage

James G. Carter, SunTrust Mortgage

Henry V. Cunningham Jr., CMB, Cunningham & Co.

James H. Danis II, CMB, Residential Mortgage Corp.

Robert F. Eustis, CMB, Eustis Mortgage

Robert Gaither, Bank of America

Bill Griffin, Lender Processing Services

David C. Gunn, CMB, Fifth Third Mortgage

Marie Head, Prudential Huntoon Paige

Mark Hillis, CitiMortgage

Stewart Larsen, CMB, Bank of the West

Rodrigo Lopez, CMB, AmeriiSphere Multifamily Finance

David B. Lowman, Chase

Noel McGarvey, Pulte Mortgage

Denis McLaughlin, PNC Financial Group

Michael McQuiggan, Tri-Emerald Financial Group

Joseph M. Meyer, HSBC

Doug Scheunemann, CMB, U.S. Bank Home Mortgage

Robert V. Sivori, MetLife Home Loans

G. Todd White, CMB, Arvest Mortgage Co,

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