Broeksmit Addresses FHA Health in Wall Street Journal Letter to the Editor

The Wall Street Journal published a letter to the editor from Mortgage Bankers Association President and CEO Robert Broeksmit, CMB, on two subjects related to the health of the Federal Housing Administration.

Broeksmit’s letter, titled The Federal Housing Administration is Fine, says the Journal’s Aug. 14 editorial, UWM Is a Government Mortgage Canary, “seeks to link two unrelated stories under one alarmist headline.”

“The first is elevated delinquencies on Federal Housing Administration insured loans,” Broeksmit wrote. “While the increase in FHA delinquencies reflects the challenges of high housing costs, slower home price appreciation and a slower pace of job growth, it is also due to the orderly unwinding of congressionally mandated Covid-era forbearance programs. Elevated delinquencies don’t indicate a program in distress.”

“Far from exposing taxpayers to bailout risk, FHA’s Mutual Mortgage Insurance Fund remains exceedingly well-capitalized: its capital ratio stood at 11.47% in fiscal 2025, nearly six times the 2% minimum Congress requires, marking the 11th consecutive year the fund has exceeded its required level.”

Broeksmit said the second story in the Journal’s editorial cited United Wholesale Mortgage’s decision to take a $2 billion capital infusion after an interest-rate hedge went wrong. “That is the product of one company’s own misjudged bet on rates, not any indication of poorly underwritten FHA mortgages,” Broeksmit wrote. “Nor is it a reflection on the independent mortgage bank business model that has originated most of the nation’s home loans in the wake of banks scaling back their mortgage activity after the 2007-09 recession.”

Broeksmit told the Journal that conflating a single firm’s hedging misstep with FHA’s program-wide performance makes for an eye-catching headline, “but what you describe neither informs readers about the health of the FHA program nor the strength of the independent mortgage bank sector.”