Is Modernization A Sure Bet?
January 15th, 2008
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With Congress back in session the matter of FHA mortgage reform remains outstanding.
When we last left off, the House had passed HR 3915 while the Senate had approved S. 2338
Given that both houses of Congress have passed reform measures, it might seem as though we only need a short conference meeting to get a final bill.
That would be wrong.
While two bills have passed they have significant differences. Moreover, the White House is likely not thrilled with some aspects of the House version, and so a veto is possible.
The FHA program is churning along quite well as it is and in Washington it always makes sense to leave untouched anything which actually works. At the same time the reform effort is opposed by those who do not want to lower the down payment requirement (too much risk) and who worry about the use of risk-based insurance premiums instead of the current flat premium system where every borrower pays the same fees — a GAO study says a risk-based system “shows that 43 percent would have paid the same or less under the risk-based pricing proposal than they actually paid, 37 percent would have paid more, and 20 percent (those with the highest expected claim rates) would not have qualified for FHA insurance.”
If FHA “reform” means that 20 percent of borrowers who would have qualified would be left out in the unsheltered cold with reform and modernization you have wonder: Who really benefits?
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This entry was posted on Tuesday, January 15th, 2008 at 3:16 pm and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
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January 16th, 2008 at 12:02 pm
hi,
This is an important post and it is linked to from here:
http://www.opencongress.org/bill/110-s2338/show
We want everyone to get involved in the debate and to be aware of coming measures. We’re hoping you want to help get the ball rolling in the comments section.
We’re glad you are working on these issues and want to help in any way we can .
Tiffiniy
January 18th, 2008 at 4:36 pm
We need to raise the FHA Maximum insurance $ amount to keep up with cost of today’s house. Well help with allowing more people to use FHA lending,etc. Also raise will allow people to take advantage of reverse mortgage in order to save their homes and preserve or maintain theer living or quality of life.
January 31st, 2008 at 7:53 am
FHA Reform is necessary for tens of thousands of Americans who no longer qualify for Conventional Financing, and who are interested in HELPING the ECONOMY by purchasing one of the millions of homes now on the market. The Stimulus package incredibly offered to include this legislation, but the President took that option off the table this week. FHA REFORM would be quickly passed if they would include it in the Stimulus package - AND this would actually create a STIMULUS!