The Mortgage Bankers Association expressed concern today over the Bush administration’s proposed budget for housing, saying that the proposed budget not only imposes new taxes on homeowners and renters by increasing fees for key housing guarantee and insurance programs, but also falls short on the need for structural, in addition to programmatic, FHA reform. Of primary concern to the MBA is the proposed budgets efforts to reform the FHA single family program. Although the budget proposes numerous changes, including raising loan limits from 87 to 100 percent of conforming loan limits and introducing risk-based pricing, the MBA said it believes the proposed reforms should go further and include investment in technology and personnel, as well as providing FHA with authority to introduce new programs without Congressional approval. “Comprehensive FHA reform is crucial to the future of low- to moderate-income, first time homebuyers becoming homeowners and realizing the advantages of the American dream,â€? said MBA chariman John M. Robbins. “This has been a priority for MBA and will continue to be. We will work closely with Congress to help people who want to be homeowners become homeowners.â€?

The Association also expressed concern that the Administration is proposing an increase in insurance premiums for several of the multifamily programs, a proposal the MBA characterized as “ill-conceived,” saying it taxes programs that provide badly-needed affordable rental housing. Last year, 122 Members of the House and 26 Senators sent a letter opposing a similar increase. Also of concern, the trade organization said, was the potential expiration of of TRIA after 2007, which was not addressed in the budget proposal released earlier this week. “The private insurance industry simply cannot price for the risk of a terrorist act,“ said chariman-elect Kieran Quinn. “It is critical to the commercial and multifamily finance markets that TRIA be extended, as a public, private partnership remains necessary to assure that terrorism insurance is available and affordable.â€? The proposed budget would also increase by 50 percent the fee for the Rural Housing Service’s single family guarantee program. As the RHS program is frequently the only option for potential homeowners in rural areas, the MBA said this increase will make it even more difficult for families in rural areas to become homeowners, especially since the Administration zeroed out funding for the RHS single family direct loan program. In spite of its concerns elsewhere, the MBA said it supports the Administration’s proposal to create a new GSE regulator with authorities comparable to other world-class financial regulators. The organization has long advocated for a strong, effective GSE regulator to protect the financial stability of the GSEs. For more information, visit http://www.mortgagebankers.org.