Senate Committee to Vote on FHA Modernization

by Peter G. Miller
September 16th, 2007

The Senate plans to vote on FHA modernization this month, but stay tuned for an exact date.

Patrick Rucker, the very sharp reporter for Reuters who covers such things says the Senate Committee on Banking, Housing, and Urban Affairs will consider FHA modernization on Wednesday, September 19th. This is a change from the committe calendar which shows that the matter will be taken up a week later on the 26th.

Does the change in dates matter? Maybe yes.

The House has already passed H.R. 1852, but that version of FHA modernization is unlikely to fly. If the Senate committee has moved up the vote, then there may well have been a back-door agreement as to what legislation can be acceptable to all sides — one side wanting more FHA loans (the Democrats) while the other side wanting to assure that new legislation does not create undue taxpayer liability (the Republicans).

The other idea is that there’s not any agreement but that the foreclosure problem has become so acute that something must be done. Figures from RealtyTrac.com show a huge foreclosure surge, with homes in the process of foreclosure during the first six months of the year up 55 percent when compared with the first six months of 2006.

Stay tuned — there may be big news on Wednesday, but most likely what will see is just another step in the legislative process. Why? Because if the house and senate bills differ, the matter will have to be smoothed out with a conference committee meeting between the two chambers. That may not happen for weeks or months.

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