John A. Courson, president and CEO of the Mortgage Bankers Association (MBA) has issued the following statement in response to the Federal Housing Administration's (FHA) announcement of its fiscal health and financial outlook: "Today's announcement is a major wakeup call for FHA and the lending community, but no reason to panic. The two percent reserve requirement was established in order to ensure that FHA could stand the stress of a major housing and mortgage market event. It is safe to say that FHA is facing that type of event today.
"We are encouraged by the corrective actions FHA has already announced and has begun implementing - the elimination of seller-funded downpayments and the recent program changes to help it better manage its risk - that should help FHA come out of the current housing crisis positioned to continue its mission promoting more affordable mortgage credit for borrowers.
"MBA and its members, who originate the vast majority of all FHA loans, have long been leading efforts in Washington to give FHA the tools it needs to best serve its mission. That is why we are continuing to encourage Congress to appropriate the critical funding that FHA needs to hire and maintain staff and update its technology."
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