A White House proposal to privatize and revamp the Federal Housing Administration has caused concern among mortgage bankers and the effects of such a measure could, among other things, lead to the demise of Ginnie Mae.

The talk of privatizing FHA is nothing new in Washington, but in a White House passback budget proposal, the administration revealed that it intends to privatize FHA and radically change the way the HUD agency does single-family mortgage insurance business. Some sources have said, however, that while OMB has offered the plan, HUD isnt endorsing it.

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