Local Realty Executive to Direct FHA
Monday, March 23, 2009
David H. Stevens, president of Long & Foster, the Washington real estate firm, is expected to be selected today to run the Federal Housing Administration.
Though the Obama administration declined to confirm the appointment yesterday, sources said Stevens has been undergoing the required background checks. These sources spoke on condition of anonymity because they did not have the administration's permission to speak publicly.
If confirmed by Congress, Stevens would be the only FHA commissioner in recent years with a strong background in single-family home mortgages. After more than two decades in the financial services industry, Stevens has overseen every aspect of home financing, from originating mortgages to selling them on the secondary market. That experience appealed to the administration, the sources said.
"They needed someone with a deep knowledge of the mortgage industry because of the challenges facing the country and the FHA in particular, and he fits the bills," said one source.
Stevens, 52, became president and chief operating officer of Long & Foster in October. The company, which recently moved to Chantilly from Fairfax, is the nation's largest privately owned real estate firm.
Stevens would be joining the FHA at a time when the agency has been thrust into a high-profile role. Once the subprime industry vanished, the FHA volume of home mortgages exploded. In the fourth quarter of last year, the agency insured about 30 percent of all new mortgages, compared with about 2 percent three years ago. Since then, policymakers have questioned whether the FHA has the personnel and technology to handle the workload and properly scrutinize the lenders it does business with.
The FHA, created in the Depression year of 1934, does not make loans. It insures mortgages against default for lenders approved by the agency and collects premiums from borrowers to cover losses from defaults and foreclosures.
Because the loans it backs do not require hefty down payments or stellar credit scores, demand has surged. In addition, the amount that can be borrowed has grown dramatically, making the loans attractive for refinancing.
But the FHA's default rate has been rising. About 4.3 percent of FHA loans were at least 90 days late as of the end of last year. More than 9,200 of the loans insured by the FHA in the past two years have gone into default after no payments or only one, and the pace of such instant defaults has tripled in one year.
Stevens, a native of New York City who grew up in Connecticut, began his career at World Savings Bank, a California savings and loan, where he worked on the banking and mortgage side of the business and left as group senior vice president after 16 years there.
He was recruited by McLean-based Freddie Mac, where he worked from 1999 to 2005 also as a senior vice president running the single-family business and regularly negotiating contracts and interacting with all lenders who did business with the firm.
From there he went to Wells Fargo Home Mortgage, where he was the executive vice president dealing with mortgage brokers.
Stevens joined Long & Foster in 2006 to lead its affiliated businesses, including the mortgage, title and insurance divisions before he was promoted to president and chief operating officer in October.