A Growing Housing Fraud

The March 8 front-page story "The Next Hit: Quick Defaults" talked about the many mortgage defaults now occurring after one payment or no payments. The writers blamed only ruthless lenders who talk unsuspecting people into loans they cannot sustain. That is probably mostly true. But how about the sophisticated borrowers who realize that they can live in a house rent-free for the year or two that may be required to oust them?

DONALD L. WATSON

Arlington

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"The Next Hit: Quick Defaults" identified a growing fraud that threatens the financial viability of the Federal Housing Administration (FHA).

Last year, Congress authorized $25 million for the FHA to hire additional workers and improve technology to enhance the program and fight fraud. A portion of that $25 million is included in the appropriations bill that President Obama signed Wednesday, which is a good start, but the full amount needs to be approved.

The Mortgage Bankers Association (MBA) and its members have dedicated extensive resources in recent years to help combat fraud against mortgage lenders, which includes many loans guaranteed by the FHA. The MBA has been working with Congress, the administration and the law enforcement community to better detect and prosecute mortgage fraud. Borrowers and industry insiders who commit fraud need to be punished.

The FHA program is a crucial underpinning of our housing finance system, helping qualified first-time home buyers and those who may not have other borrowing options. It is incumbent upon the lenders and congressional and federal officials to give the FHA the tools it needs to successfully carry out its mission.

JOHN A. COURSON

President and Chief Executive

Mortgage Bankers Association

Washington