WASHINGTON – March 4, 2013 – National Association of Realtors® (NAR) President Gary Thomas testified before the Senate Banking Committee last week in support of home loans issued by the Federal Housing Administration (FHA).

In his testimony, Thomas said that, without the FHA, the housing downturn and economic recession would have been far worse for the nation.

“FHA helped fill the void over the past five years after private lending fled the market by providing safe, affordable access to mortgage credit to millions of Americans who wanted to purchase a home,” Thomas said. “Had FHA not stepped in … many families would have been unable to purchase homes, current homeowners would have experienced far greater drops in equity and their home’s value, and our nation’s economy would be much further from a recovery.”

Thomas noted that FHA has never offered risky mortgage products, used predatory lending practices or engaged in exotic underwriting. Recent FHA financial losses resulted from overall market conditions.

“FHA currently has one of the strongest books on record and the quality of borrowers has skyrocketed; continued market improvements and rising home prices will also help improve the fund’s future financial condition,” Thomas testified.

Thomas said NAR welcomes a time when FHA’s market share is reduced, but the country isn’t there yet due to uncertainty about pending financial regulations and the future of the secondary mortgage market.

“Once the rules for mortgage finance are resolved and housing prices stabilize nationwide, we anticipate that private investors will return to the market and FHA’s market share will return to more traditional levels,” Thomas said.

© 2013 Florida Realtors®