Wednesday, September 19, 2007

Regarding the Sept. 9 editorial "Revitalizing the FHA":

An expanded role for the Federal Housing Administration is needed to help resolve problems in the subprime mortgage market. A revitalized FHA could help families refinance their homes and avoid foreclosure while once again giving the agency a leadership role in meeting housing needs that the private mortgage market is not filling.

The need, however, far exceeds the Bush administration's limited proposals. The FHA can and must play a far more robust role in aiding the hundreds of thousands of families facing foreclosure.

One promising approach suggested by the National Housing Conference's Center for Housing Policy is "shared equity," through which the FHA would provide fixed-rate mortgages, at affordable amounts, to families facing foreclosure. The balance of such a loan would be converted into a mortgage that would be repaid when the home is sold, along with a share of any home price appreciation.

JOHN K. McILWAIN

Washington

The writer is a senior resident fellow at the Urban Land Institute and chairman of the Center for Housing Policy.