If a key mortgage player says the housing market is already near the bottom, then should we all ring the alarm bells? Federal Housing Administration Commissioner David Stevens says exactly this in a congressional hearing this week.

“I think we’re near bottom. I think we’re at minimum, near the bottom,” says Stevens.

Ever since the U.S. financial crisis set in, the Federal Housing Administration has become a major player in the home mortgage market. This government agency originally served as the aid needed by first-time home buyers with impaired credit or little money for down payment. FHA insures mortgages and assures lenders that they will still get paid even if borrowers default.

Recent numbers, though, show that FHA has kicked out 1,500 lenders out of the insurance program; this number reflects the past year alone. The government agency has also imposed $4.27 million in civil fines versus the lenders violating the agency underwriting rules. The information provided all came from the Commissioner himself, as told to the House Financial Services Committee.

Stevens also revealed that FHA is currently developing new technology that will allow them to detect lender fraud at the loan level; this is important, he reiterated, since fraud usually involves – to some extent – a conspiracy among lending officials. To better the FHA performance, the agency is now also requiring more capital and higher insurance premiums from lenders. Limits on borrower’s allowable credit scores are also being set.

In a project by The Center for Public Integrity and Washington Post, it was reported that FHA still has failed to eliminate several lending executives that have criminal records. Firms of these lending executives are still doing business with FHA and this is a violation of the federal law. Since the agency also lacks the power to ban executives (who have been proven of wrongdoing or excessive default rate) from landing jobs at other lenders, FHA’s current aggressive campaign has been derailed.

In the said hearing, Stevens is also renewing FHA’s plea to have a legislation expanding the power to recoup losses from insured loans. Right now, only the loans originating from lender-insured process for the best-performing institutions are covered by the agency’s power – and these are but less than third of FHA-approved lenders.

Of the six million home loans that FHA insured this year, 91% are current. And some of these have down payments as low as 3.5%. Of the U.S. home mortgages, 90% are financed by FHA and the government-seized Fannie Mae and Freddie Mac.