Bob Broeksmit raises red flags over unfair competition
The Mortgage Bankers Association (MBA) has voiced opposition to the extension of the Federal Housing Administration (FHA) and Federal Financing Bank (FFB) Risk Sharing program, calling on the Department of Housing and Urban Development (HUD) to address high fees within existing housing programs.
In a statement released on February 29, MBA CEO Bob Broeksmit expressed concerns over the extension: “While we agree with the Administration that there is a desperate need for more affordable housing supply, extending the FHA-FFB Risk Sharing program is unnecessary, as it undermines the successful FHA Multifamily Accelerated Processing (MAP) program and creates unfair competition with the private sector.”
Under the current system, HUD MAP lenders are bound by stringent regulations, including a comprehensive underwriting guidebook spanning nearly 1,000 pages, adherence to Davis-Bacon split-wage requirements, and strict environmental standards. However, participants in the FFB program are not subjected to the same rigorous criteria, potentially compromising the safety of housing options for vulnerable populations.
Broeksmit proposed an alternative approach, suggesting that the administration should focus on enhancing existing programs to better serve lenders and borrowers.
He outlined several measures that could achieve this goal: “Reducing or eliminating more than 20 unnecessary and duplicative fees, increasing statutory loan limits, lowering multifamily mortgage insurance premiums and excessive escrow account requirements, and increasing the wind/named storm insurance deductibles would have more impact in developing more affordable rental housing.”
The MBA stated that it will continue to urge collaboration between the Administration, Congress, and industry stakeholders to develop more affordable and effective lending programs.
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