The Federal Housing Administration acting commissioner Carol Galante said her federal agency not only successfully acts as a countercyclical tool during times of economic distress, but is also a model for prudent mortgage servicing practices.
In recent times, the FHA went from 2% to 34% market share, placing significant stress on the activities at the mortgage-backer. Most of the challenges that remain, Galante added, deal with the former, smaller legacy book.
"As an example we were the first to start 12 months forbearance programs for the unemployed," Galante said at the Zillow (Z) second housing forum. Galante said the FHA remains dedicated to reducing its footprint in the lending space.
"FHA's footprint needs to recede over time, private capital needs to come back aggressively," she said.
The forum is titled “California’s Housing Market: Navigating the Post-Bottom Landscape,” and is taking place this morning in San Francisco.
Galante said that during the recession, the FHA helped 3.5 million people buy homes. Another 2 million successfully refinanced. 1 million of those people are Latino and African-Americans. Galante added 52% of minorities buying a home with a mortgage use FHA backing.
Galante is making the rounds on the conference circuit and is providing a great deal of insight into the Federal approach to housing.
For example, Galante told a crowd of mortgage professionals, at HousingWire's recent REperform conference, her institution does not plan to immediately initiate an REO-to-rental program similar to Fannie Mae.