ORLANDO, FLA. -- As the mortgage market becomes increasingly competitive with the growth of affordability products, the government housing programs - which have specific lending restrictions - are falling behind not just in terms of market share but also in terms of product innovation, particularly among subprime borrowers. Responding to these issues, the Federal Housing Authority is implementing drastic changes to its program, according to Brian Montgomery, Federal Housing Commissioner at the U.S. Department of Housing & Urban Development in remarks made at the Mortgage Bankers Association's 92nd annual Convention and Expo 2005 held here last week.

"The FHA is at a crossroads," Montgomery said at the session called What's Going on with the Government Housing Programs, adding that without changes, the market would "watch the FHA fade away."

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