The committee will come to order. I now recognize myself. Im sorry. Without objection. Chair is authorized to clear recession of the committee at any time. Without objection members of the full committee not on the subcommittee are authorized to participate in todays hearing. And the hearing is entitled an examination of the federal Housing Administration and its impact on Home Ownership in america. I now recognize myself to give an opening statement. Okay. There was a time when if h as policies explicitly denied access to the American Dream of Home Ownership to black families and people of color, making owning a home he privilege afforded primarily to white americans and contributing to the racial wealth gap as we know it. As of the Third Quarter of 2019, the white Home Ownership rate is 73 compared to nearly 48 for latinos and 43 for black homeowners. Today fha plays an Important Role in our Housing Finances system that is helping to ensure that access to homeownership is broadly available and if why 2019 alone faa helped over 615,000 borrowers become holders for the first time with over 33 of fha markets endorsements serving minority owners over half showing low to moderate income borrowers if she also plays a vital role in expanding access to affordable rental housing through its multi Family Insurance Program yet in the midst of the current Affordable Housing crisis it they have burdens so many families with an affordable rents secretary carson chose to terminate if h aides partnership with the federal financing bank, which provided lowest cost financing for affordable multi Family Housing loans. Fha is designed to play a Counter Cyclical role in the Housing Market meetings that its market share expense where when the private market receipts. This helps provide long terms prevailed to the Housing Market market particularly knowing economic downturns. Thankfully markets and our overall economy have been trending well due in large part to the focusing policies off the obama administration. Yet there remained concerns that fha is failing to take adequate measures to help borrowers avoid foreclosure including elad elderly borrowers with reverse mortgages in addition immediately following president Trumps Administration hide suspended a then quarter point decrease in annual fha insurance premiums for moist fha ensured markets according to research from the National Association of real utters, roughly 420,000 creditworthy borrowers were priced out of the home buying market in 2013 solely due to fhas high premiums. Despite this Strong Financial health of fhas mutual markets Insurance Fund and calls from advocates and stakeholders to take lift the suspension, how did leadership has maintained this suspension indefinitely. This decision has dismissed the homeownership opportunities inaudible and across this nation, looking memory hardworking families into writer ship and exacerbating racial wealth gap. With that i look forward to hearing the testimony of mr. Montgomery today, and i yield back and recognize the gentleman from. Thank you chairman clay, i appreciate youre holding this hearing today. Commissioner montgomery i appreciate you hearing here before they. I know you wear multiple hats and how hard and we welcome you as commission of the fha. Fha has a Critical Mission of helping individuals achieve their dream of homeownership. It has consequences. Homes active savings vehicles and long Term Investments that generally appreciated value. In other words owning a home and building equity helps families generate wealth. In fact according to a 2018 study yet jim Duke University reducing disparities at Home Ownership by race would narrow the racial wealth gap by 31 . Earlier this year when some of my colleagues on the other side attacked the idea of gentrification, i urge them to join me in joining to address a real solution to the real problem and that is the disparity in racial homeownership and i want to recall on the chairman today to work with me on those efforts because i think we both believe in that and want to work on that in the future and commission in montgomery i would ask you to join us as we try to address that effort because i think it is a very important effort to help ensure everybody can achieve the American Dream and i want to talk more about that. Fha i think is a very important tool in that and we should do fhfa private insurance to help people climbed the economic ladder but thats ladder needs to be stable they catch a climb that ladder if the inaudible commissioner you know her sifted hard in three different administrations it under president s bush obama and trump, so i know you have by partisan credentials in working three in three administrations different political fox. Your time spent in public for Service Gives you some unique insights into the housing sector and how it has evolved deep before and after the housing crisis i know you you will talk about that today. I know your experience has given your appreciation for the faa just bought this as a Counter Cyclical buffer i think thats really important. Particularly important during downturns but also our understanding of how the rage here is seeing how razor thin the fha in shorts find is right now and i know its a lot better than it was it is still not where you want it. That puts taxpayers at risk and i appreciate all the work that you have done to build fhas fund to its highest level in 12 years out i want to congratulate you for that because i think there is more to be done and im glad that we are not putting it at risk by artificially cutting rates before the fund is stable it. Also begs a larger question of how we can strengthen financial reform by transferring risks from them a taxpayer to the financial sector. The federal government has a terrible record of pricing risk and you only need to look as far as the fragile flood Insurance Program to see that andy f. Aj does that a two but by the same token goverment can also be just capable of determining which individuals are good risk and therefore should pay less. So i think there is some reforms we can do on pricing instead of a one size fits all approach that uses the private sector for private discovery, some unique partnerships in the future, and i look forward to talking to the chairman about that. Because i think some folks deserve to actually do a little better. And with that i also would ask unanimous consent to in certain opening concert from Ranking Member mchenry off the full committee in tunisia record. I do not object. I yield. Back to the gentleman from or higher yields back. And today we welcome this testimony. Brian montgomery off the federal Housing Administration, witness and reminded that your oral testimony will be limited to five minutes without objection. Your written statement will be made a part off the record and your now recognized for five minutes to give your oral presentation of the testimony. Thank you very much mister chairman and Ranking Member stars and distinguished members saw of the subcommittee i am honored to hear appear before you to discuss improvements to the fha recently. And there are a lot of programs was your intention. Efficacy made significant progress in improving the Financial Performance off its Insurance Fund, mid to guesting risk with its programs, reducing regulatory burdens, and market dicing is technology platforms. Sickness itself these actions were presented to your last month. In our 2019 annual report to congress and the state of the mutual morgans mortgage insurance front. As you know congress hazard statue story minimum 2 cotton total ratio fund. The capital ratio is a strong indicator of the funds Financial Health and includes our four and reverse mortgage products. The annual short shot that the capital ratio increased 2. 7 6 last year to 4. 8 in fiscal year 2019 well, above the 2 minimum in addition to them a check capital of what we referred to as network of 62 billion more dollars more than 28 billion more that in the past year. The improved health of the mri finding is good news to us. If i 19 if a change short for mortgages for almost 1 million households, of which 616,000 went to four time home buyers if. Its a remains an important option for minority communities as well. Last year minorities represented 36 of all fha purchased mortgage borrowers. Compared to just 20 in conventional lending channels. That Housing Finance reform plans submitted to the president in september proposes a number of recommendations to further reduce risk to the mi5 and to protect taxpayers. If it you are main changes focused on mortgage financing for Market Income families. All the recommendations planned are imported some priorities are particularly noteworthy for the purposes of todays hearing. One priorities the need to radically water nice fhas Information Technology infrastructure where Single Family business runs off 15 different systems, many off adequate it mainframes, some of which are more than 40 result. In early 2019 hard formed a highly qualified fha Modernization Project team, started by gathering business requirements, every element of the online process of from application to origination, servicing and threw claims processing. Working with Single Family staff at headquarters and in the field, this team has an ultimate objective of fully digitizing the entire lone life cycle. That is very great for that congress appropriated an additional 20 Million Dollars specifically to modernize our Single FamilyTechnology Systems earlier this year. And both under house and Senate Appropriation bills for if i20 would provide an additional 20 Million Dollars 80 to 90 Million Dollars of total funding to complete these critical and long overdue projects. Beyond our Financial Health and infrastructure, improving its operational building to serve our customers is also critical priority. This is an area where we have made Great Strides the example we have dedicated significant focus to default processes, this is making it less burdensome for a law while ensuring that it protects taxpayers, and promote sustainable homeownership. Additionally our disaster had a claim implemented last year impacted by 2017 disasters will now be a standard of mortgage relief auctions for all people impacted by major disasters. This allows many jersey on payments without modifying their loan. Or readvertising alone term. For avoiding both foreclosure and payment increases. Also streamlines income documentation another requirements expediting relief. Will be forward we must focus on seeking the right. Balance between facilitating access to mortgage credit and better managing a risk. Our mission is to make certain faa remains a stable reliable resourced providing Housing Finance support first time home buyers. And another borrow sir that thats a route, and think the Concept Committee for your time, and now ready for your question thank you. I want to thank the commissioner, for your testimony today also, were in the middle of the vote on the house floor so this time, work on a go to recess, and we will immediately reconvene after, the facts folks get back over here, thank you for your patients with that. We are now ready to proceed under the five minute rule and i will yield myself five minutes to begin the question phase of the hearing over the last year had is taken a number of actions to