A very fragile housing recovery is under way. Growing purchase demand, stabilizing home prices and improving mortgage performance have left many in the real estate finance industry optimistic about the future. But while all of these positive developments should be lauded, the challenges in today's economy have left many working in private capital reluctant to harness the demand engine of the U.S. housing market. Unfortunately, such thinking will not fuel sufficient economic growth.

The housing market has changed significantly over the last several years. Recent headlines, however, suggest efforts are afoot to encourage lenders to revert to the days of old when any applicant for a loan was approved.

Let's be clear: The abusive era of no documentation, no down payment and negative amortization is over. The Dodd-Frank Act effectively eliminated these products or practices and removed subprime lending from the system.

However, the onslaught of new regulations has gone well beyond consumer protection, causing some creditworthy borrowers to be rejected for home financing. Some borrowers with good credit scores who are willing to make a 10% to 15% down payment still cannot obtain a loan. Because the rules governing lenders today are unclear, and at times contradictory, the risk of litigation, indemnification and repurchase has lenders running scared. Lenders protect themselves by only approving loans to those with excellent credit and zero chance of default.

The sheer volume and magnitude of regulatory changes has created confusion and an atmosphere where the wealthy can certainly qualify for mortgage loans. For others, the process is harder. Qualified first-time, low- to middle-income borrowers are suffering as a result. Many have been shut out altogether.

As former commissioner of the Federal Housing Administration, I witnessed firsthand families struggling to find safe, affordable homes. I worked tirelessly to ensure rules and regulations were set in motion to provide a strong foundation for FHA borrowers and lenders that created sustainability, but did not overly constrain access.

Today, the FHA is the dominant source of mortgage financing for borrowers with low down payments and those without high incomes or inherited wealth. Many of these are first-time homebuyers. Young families looking to put down roots in a community must be served if we are going to grow our economy and sustain the housing recovery.

The FHA must balance three priorities: restoring financial solvency, preserving its core housing mission and maintaining the agency's countercyclical role.  Given the FHA's current impact on the housing market, it is important that all policymakers take seriously the agency's involvement. Specifically, regulators and members of Congress alike should support the FHA's efforts where possible. Also, banks must have a clear pathway to have the confidence to lend.

There is little argument that uncertainty continues to permeate the real estate finance system. Dodd- Frank brought with it new regulations and oversight from more federal agencies. But the details remain murky. It is unrealistic to expect that the housing market will be fully operational until this uncertainty is addressed.

Ultimately, we all want the same thing: a fully functioning market that relies most heavily on private capital, with a limited, appropriate role for federal programs.

Do not let headlines impede your judgment. The real estate finance industry along with consumer advocates and policymakers have successfully changed the lending environment to prevent subprime loans and predatory lending. Additionally, banks have gone to extraordinary measures to put preventative practices in place.

There is no going back. There is only the way forward. We need to adopt a system where homeownership is a doorway to opportunity and qualified borrowers can once again feel safe, confident and secure in their loans. That is the system which will benefit all involved and continue to fuel the housing recovery.

David H. Stevens is president and CEO of the Mortgage Bankers Association. He previously served as assistant secretary of housing/federal housing commissioner at the U.S. Department of Housing and Urban Development in the Obama administration.