"Main Street" Mortgage Lenders: FHA Critical to Housing Market.

WASHINGTON -- Community Mortgage Lenders of America (CML America) today sent a letter to the United States Congress urging continued support for the Federal Housing Administration (FHA). The letter (on the following page) is co-signed by a broad coalition of housing finance, consumer, and local government groups.

"The FHA is the backbone of the mortgage market today," said Scott Stern, chairman of CML America and CEO of Lenders One, a St. Louis based mortgage cooperative. "FHA Commissioner David Stevens has taken important steps to ensure that FHA remains strong and sound so that the agency can continue to play a key role in the housing recovery. FHA has served the American homeowner for over 75 years, and borrowers should be confident that FHA will remain a leading source for responsible lending."

About CML America

CML America represents the nation's Main Street mortgage lenders. CML America is founded on the principal that a thriving independent mortgage banking sector increases competition in the industry and provides borrowers with more choice, lower costs, and innovative products. For more information, visit http://www.cmlamerica.com.

November 12, 2009







United States Senate



Washington, DC, 20510







United States House of Representatives



Washington, DC, 20515

Dear Senator/Representative:

The role of the Federal Housing Administration (FHA) has never been more important than it is today, and we urge you to assure the continued effectiveness of this important agency. FHA has been a primary factor in allowing hard-working families to purchase a home, and provides mortgage liquidity when so many others have pulled back from this market. FHA has helped to strengthen housing in this country and has helped our national economy to recover.

Without FHA, families would be unable to purchase homes and cities and counties would suffer from continued foreclosure and blight. On September 30, the Federal Reserve published its draft explanation of the 2008 Home Mortgage Disclosure Act (HMDA) data. That report shows the critical role FHA plays in the market. According to the Federal Reserve, FHA was responsible for 21% of all home loans during 2008, but by December of 2008, it had increased to 38% of home purchase loans and 25% of refinance loans. In addition, minority borrowers rely heavily on FHA. According to the Federal Reserve, "In 2008, more than 60 percent of home purchase loans and almost 40 percent of refinance loans to blacks were from either the FHA or VA. For Hispanic-white borrowers, nearly 50 percent of their 2008 home-purchase loans and 21 percent of their refinance loans were from the FHA or VA."1

FHA's new, expanded role has filled an important vacuum in the mortgage market. Its continued participation is critical to a housing recovery. FHA's larger market share does require increased risk management, and we support efforts that have been undertaken by the agency's new leadership. We believe FHA is taking the necessary steps to assure it remains a critical source of mortgage insurance for America's homebuyers at all times - good and bad.

On behalf of the below listed organizations, we urge you to continue to support the good work of FHA, and the regulatory and common sense business changes that are already underway at the agency. Unnecessary changes or restrictions to the program will only hamper our economic recovery and hurt millions of families who rely on FHA insurance to obtain safe, affordable mortgage financing.

Sincerely,

[TABLE OMITTED]

1 The 2008 HMDA Data: The Mortgage Market during a Turbulent Year, http://www.federalreserve.gov/pubs/bulletin/2009/pdf/hmda08draft.pdf