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Luetkemeyer Statement Following Testimony of HUD Secretary Julian Castro

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Washington, February 12, 2015 | comments
U.S. Rep. Blaine Luetkemeyer (MO-03) released the following statement after Secretary Castro’s testimony at today’s Financial Services Committee hearing entitled “The Future of Housing in America: Oversight of the Federal Housing Administration”:
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U.S. Rep. Blaine Luetkemeyer (MO-03) released the following statement after Secretary Castro’s testimony at today’s Financial Services Committee hearing entitled “The Future of Housing in America: Oversight of the Federal Housing Administration”:

“Today’s testimony from Secretary Castro was disconcerting to say the least. The Secretary’s answers were as inconsistent and alarming as FHA’s policies. It is clear to me that this agency suffers from not only misguided policy but also mismanagement. FHA continues to try to grow its way out of a problem, and it is putting the American taxpayers at risk. FHA today holds less than one quarter of the capital it is statutorily required to hold in the Mutual Mortgage Insurance Fund. When you remove the 2013 taxpayer bailout of $1.7 billion and billions of dollars more in Justice Department settlements, the capitalization of the fund falls to .08 percent. If a private company operated the way FHA operates, it would be shut down. In spite of all this, the agency has decided to deplete its only legitimate income stream by lowering mortgage insurance premiums. I fear we are headed down the same dangerous path we traveled leading up to the financial crisis and the 2013 bailout of FHA. Secretary Castro should take the time to learn about the risks associated with FHA’s book of business, develop a plan to get FHA out of trouble and back to its intended mission, and help begin to put our nation’s housing finance market on a path toward sustainability.”

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