Stevens Lauds Realtor(R) Role in Housing Recovery, Assures Soundness of FHA Program

SAN DIEGO, CA, Nov 15 (MARKET WIRE) --
Realtors(R) are the face of the housing market, the focal point of
information, involvement and inventory, and the Federal Housing
Administration is committed to help them be successful, FHA Housing
Commissioner Dave Stevens told more than 1,000 Realtors(R) at a gathering
here today.

"You help to stabilize the community, and without homeownership, there can
be no stability in communities," Stevens said. "Together, we must never
let over-exuberance overtake the housing market again, and interrupt the
housing market and the lives of untold millions of Americans. Our goal
must be nothing less than to craft a solid, sustainable housing market, a
market with a secure foundation for the future."

Stevens said he and Shaun Donovan, secretary of the Housing and Urban
Development, recognize that the National Association of Realtors(R) has
been at the forefront of efforts to address the housing crisis, and he has
met with NAR on several occasions to consider their concerns. FHA has
taken direct action on a number of those concerns.

Stevens announced that effective Monday, Nov. 16, FHA will no longer
require a second appraisal on high-balance loans for properties in
declining markets. "We did not find our previous policy to be particularly
helpful and were very concerned about the additional burden on lenders and
consumers," Stevens said. He noted the policy change will bring industry
alignment, streamline loan processing and reduce costs to consumers.

FHA has also taken action on NAR suggestions concerning condominium
mortgages. "We did not do all that you asked, but we did enact some
temporary measures to meet challenges in the condo market," he said. FHA
has excluded vacant and bank-owned real estate units from the calculation
of owner-occupancy ratios in condo projects and reduced presale
requirement from 50 percent to 30 percent, among others. These standards
will take effect December 7, and spot loan approvals will extend until
February 1 to provide time for transition.

Stevens also cited policy changes in FHA's management of risk, including
elimination of the streamline refinancing program as of January 1, and
requiring FHA-approved lenders to hold more capital to ensure responsible
lending and risk management. He also hired, for the first time in FHA
history, a chief risk officer.

Commenting on FHA's role in the present market, Stevens said FHA's share
of the mortgage market vaulted from 3 percent three years ago to more
than 25 percent today, as FHA was called upon to counter the foreclosure
crisis and offer a viable alternative for first-time home buyers.

More than 80 percent of FHA's recent mortgages have been to first-time
buyers, he said, and FHA has led the market in percentage of mortgages to
qualified minority homeowners.

"Some are worried about the volume of FHA loans, as FHA capital is
eroding," Stevens said. But he assured critics that FHA reserves are
expected to be sufficient, with $31 billion in cash reserves, and that the
FHA portfolio is sound, with an increase of 60 points in average credit
scores and a decline in 30-day delinquencies.

He called comparisons between FHA's situation now and the situations that
faced other lending institutions "ludicrous and unfounded."

Stevens said he looks forward to the day when FHA can return to a more
normal market share. "But we will stay in the game until the private
capital system can get its footing back. Without FHA during the past
several years, there would not have been a market for housing."

The National Association of Realtors(R), "The Voice for Real Estate," is
America's largest trade association, representing 1.2 million members
involved in all aspects of the residential and commercial real estate
industries.

Information about NAR is available at www.realtor.org. News releases are
posted in the Web site's "News Media" section in the NAR Media Center.

REALTOR(R) is a registered collective membership mark which may be used
only by real estate professionals who are members of the NATIONAL
ASSOCIATION OF REALTORS(R) and subscribe to its strict Code of Ethics. Not
all real estate agents are REALTORS(R). All REALTORS(R) are members of
NAR.

For further information contact:
Lucien Salvant
202/383-1176
Email Contact

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