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There’s a significant divide between those at the Federal Housing Administration (FHA) and its critics over how the FHA can improve their fiscal situation and the housing market as a whole.

To balance both their struggles and success in the market, the FHA announced “a set of policy changes” back in January that were designed to both strengthen their shaky capital reserves, and to enable the administration to aid in housing’s recovery. For the most part, the changes amounted to an increase in the up-front mortgage insurance premium (MIP).

“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” said Commissioner [David] Stevens.

While we try to publish about five new articles each week on HSH.com, last week’s snow storm put a little crimp in our schedule. The result: twice as many articles published this week on HSH.com.

Let’s take a look at the fresh content on our home page:

A relatively recent test may make it appear that way, yet we’re not so sure that’s the case.

All reverse mortgage counselors are required by HUD to pass a licensing test that is proving extremely difficult, even for many seasoned veterans:

“The test is intentionally difficult, but we believe it needs to be so because of the vulnerable population” who seek out reverse mortgages, a HUD spokesman told the Post and Courier. HUD made the licensing exam more difficult after numerous complaints that people who were providing counseling about reverse loans were not always well-informed.

The Federal Housing Administration (FHA) has found themselves launched to the forefront of the housing industry. With a relatively-new commanding presence in the housing market, the FHA has simultaneously encountered struggles and success. To balance the two, the FHA announced “a set of policy changes” designed to both strengthen their shaky capital reserves, and to enable the administration to aid in housing’s recovery.

“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” said Commissioner [David] Stevens.

HUD Secretary Shaun Donovan testified today before the House Committee on Financial Services to explain the new measures that will implemented in order to better promote the Federal Housing Administration’s solvency (FHA) moving forward.

Earlier this year, we warned that the  FHA could be the  next taxpayer bailout, and we also noted that the FHA could quickly turn into the next subprime lender. Yet, today on Capitol Hill, Secretary  Donovan said the FHA is neither. These new measures, according to Donovan, “will be focusing primarily on three areas: enforcement, improving the quality and sustainability of new loans insured by FHA, and increasing FHA capital.”

It’s as bad as many thought. The results of the Federal Housing Administration’s (FHA) annual independent audit were released yesterday after being delayed for about a week. The Federal mortgage insurer’s cash reserves have fallen to 0.53%, well below the 2% limit set by Congress.

If you’re a regular reader of this blog you’ll know that we’ve been documenting the FHA’s troubles for most of the year, and have at times referred to them as “The New Subprime,” and the probable recipient of the “Next Taxpayer Bailout.”

Finally!

We’ve read over a couple articles and blog posts today about the FHA’s new, stricter guideline for their streamline refinance program, due to go into effect next week. The advice from mortgage brokers is to submit your refi application A.S.A.P. in order to take advantage of the “old” requirements. Beginning on November 17, 2009, it’s going to get tougher for homeowners to refinance under the FHA’s streamline program. To that, we say “it’s about time.”

An FHA streamline refi allows existing FHA borrowers to refinance into a new FHA loan with limited terms and conditions to make the process easier.

UPDATE6: It’s a done deal. President Obama signed the “Worker, Homeownership and Business Assistance Act of 2009″ which institutes an extension and an expansion of the homebuyer tax credit.

The tax credit, which was due to expire on December 1, 2009, will allow first-time buyers to claim 10% of their home’s cost, up to $8,000. Buyers must sign their contract by April 30, 2010 and close by June 30, 2010 to qualify:

An opinion piece in the Wall Street Journal today warned readers that Ginnie Mae and the Federal Housing Authority (FHA), because of their growing influence in the mortgage market, are quickly becoming a growing financial liability to American taxpayers:

Only last week, Ginnie announced that it issued a monthly record of $43 billion in mortgage-backed securities in June. Ginnie Mae President Joseph Murin sounded almost giddy as he cheered this “phenomenal growth.” Ginnie Mae’s mortgage exposure is expected to top $1 trillion by the end of next year—or far more than double the dollar amount of 2007. (See the nearby table.) Earlier this summer, Reuters quoted Anthony Medici of the Housing Department’s Inspector General’s office as saying, “Who would have predicted that Ginnie Mae and Fannie Mae would have swapped positions” in loan volume?

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The Department of Housing and Urban Development (HUD) along with the Federal Bureau of Investigation (FBI) has issued a special warning for homeowners over the age of 62. With the number of reverse mortgages, also know as Home Equity Conversion Mortgages (HECMs), drastically on the rise, the opportunities for fraud are immense.

“According to HUD, the number of HECM loan originations insured by the Federal Housing Administration rose from 7,923 in fiscal year (FY) 1999 to 112,013 in FY 2008, representing an increase of more than 1,300 percent. HUD-[Office of Inspector General]OIG anticipates that the number of HECM originations will rise significantly in 2009 due in part to an increase in HECM loan limits from $362,790 to $625,500. The increasing senior victim population –– currently worth $4 trillion in home equity and estimated to grow by 10,000 people per day through 2011 –– coupled with program vulnerabilities, such as the lack of income, credit, or employment qualifications, creates significant opportunities for fraud perpetrators.”