FHA Reserves Sufficiency Hearing Testimony from Today.

HERE is consolidated file (166 pages) I constructed with all the prepared testimony for today's scheduled House Financial Services hearing on the sufficiency of FHA reserves.

I could not ignore piece of the self serving (and laughable) testimony from the private mortgage insurance industry representative:

"The percentage of MI originations has declined from 14.7% in the first quarter of 2008 to 4.3% during the second quarter of 2009. This has primarily been due to the mortgage insurers changing credit guidelines and adjusting pricing to properly address the current market risks...... the MI industry is WILLING TO BRING ITS EXPERTISE to FHA and to Congress so that we can work together on a solution to ensure the existence of a robust mortgage market."

My [editorial] translation of what private mortgage insurance companies are saying:

We have "adjusted our pricing" including "changing [our] credit guidelines" so well that we have 4% of the current market. Let us tell you how to reduce the appeal of the FHA product (which currently has 20%+ market share) and red line individual sub markets like we have now done so that we can compete.
Like health insurance companies, private mortgage insurance companies don't want to compete with the public sector. We are ENTITLED to get back to the 20% +market share that WE used to have when we grabbed market share by underwriting mortgage insurance on all the junk loan products of the recent past. P.S. We will also push for subsidies, but let's call them tax breaks or let's use some other kind of bailout fund source so they are not as obvious as the direct appropriations that government agencies require.

Originally created and posted on the Oregon Housing Blog.