Testifying today before the Housing, Community Development and Insurance Subcommittee in the U.S. House of Representatives, Federal Housing Administration Commissioner Brian Montgomery said FHA has made “tremendous strides” in improving the financial performance of its insurance programs, mitigating risks within its programs, reducing regulatory burdens and modernizing technology platforms.
He commented on FHA’s Fiscal Year 2019 Annual Report to Congress, which concluded that the HECM MMI Capital (i.e., economic net worth) improved by $7.71 billion, moving from negative $13.63 billion at the end of FY 2018 to negative $5.92 billion at the end of this past fiscal year.
“The HECM program’s financial footing is significantly more stable today, but remains far short of the Department’s objectives,” he told lawmakers.
To further improve the fiscal soundness and viability of the HECM program, Commissioner Montgomery noted that FHA published Mortgagee Letter 2019-16, which extended the HECM Collateral Risk Assessment requirements indefinitely, and Mortgagee Letter 2019-15, “which provides more guidance for HECMs related to non-borrowing spouses, as well as to the heirs of the last surviving HECM borrower, and both clarifies and streamlines Servicer responsibilities in the assignment process.”
Commissioner Montgomery noted during the Q&A session that while reverse mortgages are not for everybody, they “have a great social mission to help seniors age in place,” and he continued, “thankfully because of good home price appreciation and some other changes that we made, we seem to be headed in a much better place than we were last year.”
Read the full testimony and watch a web cast of the hearing at https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=404857