WBK Industry - Federal Regulatory Developments

FHA Releases 2022 Annual Report to Congress Addressing Its MMI Fund

01 Dec 2022

FHA recently released its 2022 Annual Report to Congress on the financial condition of its Mutual Mortgage Insurance Fund (MMI Fund). The MMI Fund supports FHA’s single-family mortgage insurance programs, including its forward mortgage purchase and refinance transactions, as well as mortgages insured under its HECM (i.e., reverse mortgage) program.

Per the Report, highlights from Fiscal Year 2022 include:

The overall Capital Ratio of the Fund increased by three percentage points over the previous fiscal year, ending at 11.11% as of September 30, 2022.
FHA’s forward mortgage portfolio achieved a stand-alone capital ratio of 10.47% as of September 30, 2022, a 2.48 percentage point increase over fiscal year 2021.
The FHA Home Equity Conversion Mortgage (HECM) portfolio’s stand-alone capital ratio stood at 22.77% as of September 30, 2022, a 16.69 percentage point increase from fiscal year 2021, due in part to the permanent allocation to the HECM portfolio of $1.7 billion in appropriated funds received by FHA in fiscal year 2013.
The MMI Fund has $147.7 billion in MMI Capital, a $41.2 billion increase from fiscal year 2021.
Approximately 84% of FHA’s total forward purchase mortgage endorsements (678,675 mortgages), were for mortgages made to first-time homebuyers in fiscal year 2022.
In FY 2022, FHA provided an insurance endorsement on mortgages for 284,807 self-identified individuals and families of color, 29% of its total forward mortgage insurance endorsements.
From the start of the pandemic through September 30, 2022, more than one million borrowers with FHA-insured mortgages took advantage of loss mitigation home retention options or were in the process of obtaining loss mitigation through their mortgage servicer.
As of September 30, 2022, the percentage of FHA mortgages 90 or more days delinquent, was 4.77%. This is a decrease of four percentage points in one year and a reduction of more than seven percentage points from the peak of 11.90% experienced in November 2020.