MBA President Rebuts WSJ FHA Risk Claims

Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit issued a rebuttal to a Wall Street Journal editorial that connected a capital infusion at United Wholesale Mortgage (UWM) to the health of the Federal Housing Administration (FHA) insurance fund. The Journal's op-ed, published on August 13, argued the struggling lender had used taxpayer-backed FHA guarantees to make risky mortgage bets.

Broeksmit's response, published by the Journal on Friday, sought to disconnect UWM's financial moves from the performance of the FHA's Mutual Mortgage Insurance Fund (MMIF). He stated the editorial erroneously linked the health of an independent lender to the health of the federal fund.

Claims of Risky Lending

The Wall Street Journal editorial board claimed UWM President and CEO Mat Ishbia was "getting rich from making risky mortgages backed by taxpayers." It cited FHA data showing 21% of UWM's FHA loans from the past two years became seriously delinquent within a year of origination, nearly double its rate for 2022 and 2023 loans.

The op-ed suggested this stress in the FHA loan book could signal problems in the conventional mortgage market. It argued the lending system creates moral hazard, as non-bank lenders profit from originating more mortgages while taxpayers bear the risk if borrowers default.

Industry data shows independent mortgage banks (IMBs), including UWM, were responsible for 84% of single-family mortgage originations in 2025. Their share of the FHA market reached 90%, up from 57% in 2010, according to a Community Home Lenders of America (CHLA) report.

Delinquency rates have risen. MBA data for the second quarter of 2026 showed 11.79% of FHA borrowers were behind on payments, up 122 basis points from Q2 2025. The serious delinquency rate, for loans at least 90 days overdue or in foreclosure, rose 227 basis points to 2.06%. The conventional mortgage delinquency rate was 2.72% in Q2 2026.

Broeksmit countered that elevated delinquencies are a natural result of the orderly end of COVID-19 forbearance programs and do not indicate a program in distress. He emphasized the FHA's MMIF remains "exceedingly well-capitalized." Its capital ratio was 11.47% in fiscal 2025, nearly six times the 2% minimum Congress requires, marking the 11th consecutive year above the required level. You can explore more industry stats on our data pages.

Mortgage consultant Rick Sharga wrote that upcoming stress in FHA servicing books is tied more to revised loss-mitigation policies than risky underwriting. He noted FHA borrowers, often first-time buyers, typically make smaller down payments, have higher debt-to-income ratios, lower credit scores, and lower cash reserves than conventional borrowers.

"None of these factors necessarily makes FHA borrowers an unacceptably high risk; but they do limit the borrowers’ ability to escape a foreclosure if they find themselves in financial distress," Sharga wrote.

Disputing the Capital Infusion Link

Broeksmit directly addressed the Journal's claim that UWM's recent $2.05 billion capital infusion, primarily from Oaktree Capital Management and the Ishbia family, reflects problems in the FHA market or the IMB sector. He called it "the product of one company’s own misjudged bet on rates, not any indication of poorly underwritten FHA mortgages."

"Conflating a single firm’s hedging misstep with FHA’s program-wide performance makes for an eye-catching headline," Broeksmit added, arguing it does not inform readers about the actual health of the FHA program or the independent mortgage bank sector.

The Journal's op-ed reported that 70% of FHA borrowers had debt-to-income ratios above 43% as of late 2022, compared to 28% in 2012. It also stated 15% of FHA borrowers who took loans between June 2021 and March 2024 fell seriously delinquent within a year.

The editorial criticized Biden administration policies that used the FHA insurance fund to cover borrower arrears and reduce payments by up to 25% for three years to prevent foreclosures. It argued this magnified moral hazard by encouraging riskier loans, knowing the government would intervene.

Foreclosure activity has increased. ATTOM reported a 10% year-over-year rise in July across all loan types, with a 21% increase in filings for the first half of 2026 compared to the same period in 2025. However, the company noted activity remains muted by historical standards.

Market observers did not cite risky loans as the primary driver. Mirza Hodzic, founder of BlackWolf Advisory Group, said the increase stems from financial pressures and a normalization after years of unusually low activity. Higher taxes, insurance, and household costs are making recovery harder for borrowers who fall behind.

Donna Schmidt, president of DLS Servicing, called the increased FHA foreclosures a correction to more normal activity, noting they were artificially suppressed during the COVID-19 era. She predicted inflated activity for the next one to two years during this correction period. For more context on market movements, our standings page tracks broader industry trends.