MMIF Returns to Solvency
As the economy continues to improve, more good news is coming into the housing market. Though forecasts as recent as 2012 were grim for the future of the Federal Housing Administration’s Mutual Mortgage Insurance Fund, HUD recently announced that the MMIF has returned to solvency a full three years ahead of schedule. As of Monday, it was reported that the Fund was up nearly $6 billion dollars in value from the same time last year. Meanwhile, its capital ratio jumped from negative .11% to a positive .41%.
HUD is attributing this impressive growth to the aggressive policy actions put into place over the past five years. Since the onset of the financial crisis, the FHA introduced tougher standards for their underwriting, recovery strategies, loss mitigation policies, and insurance premiums. This has resulted in a drop of delinquency rates in the agency’s portfolio of 14%, and a 16% improvement in recovery rates over the previous year.
Going forward, the FHA hopes to maintain this strong trend and continue to be a valuable asset to the housing market. To do so, the agency plans to continue improving transparency and certainty in regards to their loans. Meanwhile, with mortgage insurance premiums at an all-time high, the FHA hopes to find a way to achieve a proper balance that will maintain their sustainability while simultaneously serving the borrowing public.
