The Obama Administration’s loan modification plan is showing some signs of gaining traction so the Dept. of Housing and Urban Development needs some more bucks in its FY2010 budget for the FHA. HUD Secretary Shaun Donovan told participants at the Housing Policy Council’s annual meeting that refi applications are up 80 percent since the White House introduced its initiative in February, and “14 of the largest servicers, representing 75 percent of the market, have also formalized their commitments to implement the Obama modification plan and have already begun modifying loans.”
So, volume for the FHA’s mortgage insurance program has jumped from $60 billion in FY2007 to an expected $290 billion of forwards in FY2009. “For our FY2010 budget, we are asking Congress for the authority to endorse and even higher volume—up to $400 billion in authorization for FHA insurance,” Donovan said. That would allow HUD to insure around 2.5 million mortgages. The department wants $800 million for its reverse mortgage program, too, based on “just a 0.5 percent real inflation adjusted house price appreciation for loans made under HECM [Home Equity Conversion Mortgage].”
In other housing market news, Fannie Mae narrowed its loss in the first quarter to $23.2 billion from $25.2 billion in fourth-quarter 2008, which left Fannie with an $18.9 billion “net worth deficit.” The lender marched right over to the Federal Housing Finance Agency, its conservator, for $19 billion. The FHFA asked Treasury, and Treasury said yes.