NEW YORK May 24 Financing for U.S. housing
still lacks private capital, a sign of a "very sick system,"
said David Stevens, Federal Housing Administration
commissioner, told a Mortgage Bankers Association convention on
Home purchase loans in the first quarter through the FHA,
which require a lower downpayment than competitors, surpassed
those done through government-controlled Fannie Mae and Freddie
Mac combined, he said, citing a third-party study.
Without a 20-percent downpayment, "it's very difficult to
find a solution with private capital," Stevens said. "We need
to find a way to bring private capital back to the market."
The study conducted by Potomac Partners found that Fannie
Mae and Freddie Mac helped borrowers finance $46 billion of
home purchases in the first three months of the year. FHA
insured more than $52 billion of home loans in that time.
"Let's be real. It's still a government-financed market,"
FHA guaranteed 1.9 million loans last year, up from 1.1
million in 2008 and 465,000 the prior year.
Stevens said he doubted the system would heal quickly, but
stabilizing home prices and applying stepped-up efforts to
remedy loans for responsible borrowers who are under water
would go a long way in steadying the U.S. housing market.
(Reporting by Lynn Adler and Al Yoon; Editing by Padraic