FHA Bill Moves Forward In Back Halls Of Congress

by Peter G. Miller
June 8th, 2008

The Washington Post is reporting that “senior lawmakers are meeting behind closed doors to draft what they hope will be a measure to help homeowners facing foreclosure and to create a strong new regulator to oversee the mortgage financing giants Fannie Mae and Freddie Mac.”

The idea is to jumpstart the compromise process, take the separate housing bills approved by both the House and the Senate and iron out the difference between the two bills so they can be quickly moved through the full House and Senate.

Why bother? The worry is that unless quick action is taken the $300 billion FHA modernization measure could be stalled until after Labor Day. This way proponents from both the Democratic and Republican parties hope to get the bill passed before the July 4th break.

The FHA measure would allow the FHA to insure toxic loan refinancing worth as much as $300 billion. The major concern is that the program would produce $1.7 billion in projected losses. The Senate wants to pay for the losses by diverting money from low-income housing but the House wants to keep the low-income program fully funded.

Another concern is the FHA loan limit — the House pegs it at $729,900 while the Senate would stop at $550,000.

While the White House has said the President would veto the measure, a compromise would provide cover so that the bill could be approved. However, given the worsening foreclosure crisis and changing political realities, a veto may not be sustainable.

If a veto on the FHA measure does come, a growing number of Capitol Hill Republicans would likely support an over-ride measure and their own political interests rather than a lame-duck President.

For the full story, please see: Lawmakers Seek Shortcut In Negotiating Housing Bill

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2 Responses to “FHA Bill Moves Forward In Back Halls Of Congress”

  1. Randy Wright Says:

    To whom it may concern,

    My request is that Congress be urgent about getting the final legislation figured out, and approved before the entire country goes into foreclosure!!!!!

    This is urgent congress, please get this approved.

    Thank you,

  2. karen resch Says:

    For gosh sake, do something!!
    I have borrowers who WILL go into foreclosure if the lending limit is not raised soon which will enable them to save their home wiht a reverse mortgage.

    this is ridiculous.

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