Mortgage broker Jerome Scarpello recently said something about interest rates and FHA mortgages I need to share.

"Any good parent will tell you: Sometimes you have to say 'no,' " said Scarpello, a veteran mortgage broker in Ambler.

"No" is what most credit-challenged borrowers needed to hear at the height of the housing boom, but, as it happened, there were few good parents around.

There were, however, an overabundance of people pushing subprime loans like some sort of drug, and we know the result.

Since the housing bubble burst in 2006-07, many people who can afford to own houses without magic tricks have been shut out of the market.

These are first-time buyers, whose purchases allow current homeowners to buy larger and newer houses, or allow them to retire to smaller and newer houses.

First-timers contribute mightily to the residential construction and remodeling industries, to employment, and to the property-tax base. Yet, Moody's Analytics chief economist Mark Zandi says, they have been "AWOL" from the real estate market since the bubble burst, and that fact has prevented a sustainable housing market recovery even as prices have risen, and values along with them.

In the aftermath of the economic meltdown in September 2008, credit tightened dramatically. Although this was understandable, given the severity of the recession that followed, the result was that more lower-income buyers turned to the Federal Housing Administration for mortgages.

The shift was equally dramatic. In 2007, the FHA insured slightly fewer than 300,000 mortgages. In 2010, that rose to 1.1 million home loans.

But FHA was not immune from the loss resulting from borrowers' defaulting on mortgages.

In 2009, it began adopting a series of aggressive credit-management initiatives and raised both the up-front and monthly insurance fees designed to add new revenue to offset the higher losses.

Despite the moves, FHA's primary insurance fund fell below a required 2 percent reserve level.

In 2014, the agency needed an infusion from the Treasury to make up a capital shortfall - the first taxpayer support FHA has needed since it was founded in 1934.

There is a difference of opinion among real estate agents whether FHA's last premium boost, in June 2013, derailed the train to full recovery of the housing market.

Remember, 30-year fixed interest rates had spiked one percentage point the same month, just as purchase activity was feverish. The increase didn't last; indeed, rates have fallen back to their so-called historic lows and are likely to stay there for a good part of 2015.

Still, as S. Clark Kendus of Weichert Realtors in Media observes, "I think first-time home buyers are more sensitive to rates than other groups, due to the fact that they are looking to shave costs wherever they can."

Such sensitivity also likely was true of FHA's 2013 rate boost, which pushed annual premium costs up about $900 a year for a 30-year mortgage with less than 5 percent down.

The recent decision to shave half a percentage point off the premiums will go a long way to closing the gap for buyers.

Unlike the boom days, today's borrowers must prove they can repay their loans.

"The first-time buyer needs to be prepared for the grueling process of obtaining financing, regardless of program," said Weichert Realtors' Barbara Mastronardo. "The application documentation and additional financial information required is not cut and dried."

215-854-2472 @alheavens