Hearing is entitled an examination of the federal Housing Administration and its impact on homeownership in america. And i now recognize myselffor four minutes to give an Opening Statement. Okay. There was a time when fhas policies explicitly denied access to the American Dream of Home Ownership to black families and people of color. Making owning a home a privilege afforded primarily to white americans and and contributing to the racial wealth gap as we knowit. As a Third Quarter of 2019, the white homeownership rate is 73 percent compared to nearly 40 percent for latinos and 43 percent or black homeowners. Today, fha lays an Important Role in our Housing Finances that is helping to ensure that access to homeownership is broadly available and in fy 2019 alone fha helped over 615 thousand borrowers become homeowners for the first time with over 33 percent of fha markets endorsements. Serving minority owners and half serving low to moderate income borrowers. Fha also plays a vital role in expanding access to affordable mental housing through its multi family insurance program. Yet in the midst of the currentaffordable housing crisis , that burdens so many families with unaffordable rents, secretary carson chose to terminate fhas partnership with the federal financing bank. Which provided lowcost financing for affordable multi familyhousing loans. Fha is designed to play a Counter Cyclical role in the housing market, meaning that its market share expands when the private market recedes. This helps provide longterm stability to the housing market, particularly during economic downturns. Thankfully the markets and overall economy have been trending well. Due in large part to the focus in driven policies of the obama administration. Yet there remain concerns that fha is failing to take adequate measures to help borrowers avoid foreclosure, including elderly borrowers with reverse mortgages. In addition, immediately following resident trumps inauguration, hud suspended a planned quarter point decrease in annual fha insurance premiums for most fha insured mortgages. According to research on the National Association of realtors, roughly 244,000 credit worthy borrowers were priced out of the home by the market in 2014, solely do to fhas high premiums. Despite the Strong Financial help of fhas mutual mortgage Insurance Fund, and cause from advocates and stakeholders to lift the suspension, hud leadership has maintained this suspension indefinitely. This decision has diminished the homeownership opportunities in st. Louis and across the states, and the nation, locking any hardworking families into renter ship and exacerbating the racial wealth gap. That i look forward to hearing the testimony of Mister Montgomery today. And i yelled back and recognize the gentleman from ohio. I appreciate you holding this hearing today. Commissioner montgomery i appreciate you being here for thesubcommittee. I know you wear multiple hats and today we welcome you as your capacity as fha, fha has a Critical Mission of individuals achieve their dream of homeownership, achieving that dream as real consequences. Homes act as savings vehicles and appreciate in value, in other words owning a home and the building equity helps families generate wealth. According to a 2018 study of Duke University reducing disparities in homeownership by race would narrow the racial wealth gap by 31 percent. Earlier this year when some of my colleagues on the other side attacked the idea of gentrification, i urged them to join me in addressing a real solution to the real problem and thats the disparity in racial homeownership and i want to recall on the chairman today to work with me on those efforts because i think you both believe in and what to work on that in the future and commissioner montgomery, i would ask you to join us as we try to address that effort because i think its a very important effort to help ensure everybody canensure the American Dream and i want to talk more about that. Fha i think is a very important tool in that and we should view fha and private mortgage insurance is important tool for people climbing the economic ladder but that ladder needs to be stable and we cant find the fha ladder if the Insurance Fund has imploded before they get there so commissioner, youve now served in on in different roles in three and ministrations for president bush, president obama and President Trump so i know you have bipartisan credentials of working in three administrations of different political folks. Your time spent in Public Service gives you some unique insights into the housing sector and how it default during and after the financial crisis, i want to hear some of that today. Im sure your experience has given you a Counter Cyclical buffer asthe chairman and i think thats important. Particularly important during downturns but also understanding of how the razor thin, how razor thin the fha Insurance Fund is right now and although its better than it was were still not where we want it. That puts taxpayers at risk and i appreciate all the work youve done to rebuild the fund to its highest level in 12 years and i want to congratulate you for that. I think theres still more to be done and im glad that were not putting it at risk by artificially cutting rates before the fund is stable. It also begs the larger question of how we can further the reform that strengthens Housing Finance reform by transferring risk on the taxpayers the private sector, the government as a terrible record of pricing risk and you only need to look as far as the federal Flood Insurance program to see that, fha sometimes does that too but by the same token, government and also the less capable of determining individuals are good risks and therefore should pay less so i think theres reforms we can do on pricing instead of a onesizefitsall approach that uses the private sector for price discovery, some unique partnerships in the future and i look forward to talking with the chairman about that because am folks deserve to actually do a little better. And with that, i also would ask unanimous consent to insert an Opening Statement from Ranking Member mchenry, writing number of the full committee into the record this morning. Thank you and i yelled back. Gentleman from ohio yields back. Today we welcome the testimony of commissioner Brian Montgomery of the federal Housing Administration. The witness is reminded your oral testimony will be limited to five minutes. Without objection your written statement will be made a part of the record and you are now recognized for five minutes to give oral presentation ofyour testimony. Thank you very much mister chairman and Ranking Member and distinguished members of the subcommittee. Im honored to appear before you to discuss the progress and improvements fha has made recently in the areas of programs that warrant further attention. Fha has made significant progress in improving the Financial Performance of the Insurance Fund, mitigating risks within its programs, producing regulatory burdens and modernizing its technology platforms. The successes of these actions were presented to you last month in our 2019 annual report to congress. As you know, congress has a statutory minimum two percent for the mmi fund. The capital ratio is a strong indicator of the funds of Financial Health and includes a forward and reverse mortgage products. Our reports show the capital rate will increase from 2. 76 percent last year to 4. 84 percent in fiscal year 2019, all about the mandatory two percent minimum. The mmi capital what we used to refer to as Economic Network was 62 billion. More than 27 and a half billion on the previous year. While the improved health of the fund is welcome news, households served are equally good news and fy 19, fha insured for mortgages for almost 1 million households of which 616,000 went to firsttime homebuyers. Fha remains an important option for minority communities as well. Last year minorities represented 36 percent of all fha mortgage borrowers compared to 20 percent in conventional lendingchannels. Thats Housing Finance reforms plan submitted to the president proposes a number of recommendations to further reduce risk to the mmi fund. And to protect taxpayers and ensure fha maintains its focus on providing mortgage financing to modern income families notserved by traditional underwriting. So all the recommendations in plan are important, several priorities are noteworthy for the purposes of todays hearing one priority is the need to modernize fhas infrastructure, or Single Family business runs on 15 different systems, many of them of antiquated mainframes some of which are more than 40 years old. In early 2019 on form and fha Modernization Program team started by governing business requirements and for every element of a lowlying process of application origination, servicing and proclaims. Working with singlefamily Staff Headquarters and in the field this team as the ultimate objective of digitizing the entire loan lifecycle. That is very grateful congress appropriated an initial 20 million simply to modernize our singlefamily Technology Systems earlier this year and that both house and Appropriations Bills fy 20 would provide an additional 20 million. We had a way to go and hopefully the 80 90 million in total funding to complete these critical and longoverdue modernization projects. Beyond our financial help and it infrastructure, improving fhas operational ability to serve our customers is also a critical priority. This is an area where we have madegreat strides. We have dedicated focus to improving singlefamily default processes. This is makingit less burdensome to serve as loans , ensuring that our loss mitigation options taxpayers and promotesustainable homeownership. Our disaster standalone partial claim and limited last year to assist homeowners impacted by 2017 disasters will now be a standard mortgage relief option available for all people impacted by major disasters. This allows many homeowners to resume payments without modifying their loan or reamortizing the loanterm. Both before the loan foreclosure process and streamlined income documentation and other requirements to expedite relief. Looking forward we must focus on seeking the right balance to facilitating access mortgage credit and better managing our risk. Our mission is to make sure fha remains a stable and reliable resource to provide Housing Finance support, to firsttime homebuyers and other underserved borrowers. I believe that is a mission we all share and iwant to thank the subcommittee for your time and i look forward to your questions. I want to thank the commissioner for your testimony today. Also we are in the middle of a vote series on the house floor so at this time were going to recess and we will immediately reconvene after the last vote when we get back over here thank you for your patience. We stand adjourned with four votes. We stand in recess, im sorry