Last week House Financial Services Chairman Hensarling (R-TX) introduced a comprehensive discussion draft on Housing Finance Reform. The draft bill, called the Protecting American Taxpayers and Homeowners (PATH) Act, includes reforms to FHA, the GSEs, and the financial regulatory law known as the Dodd-Frank Act.
NAR is still reviewing the legislation which will be the subject of a legislative hearing on July 18. Based on initial analysis, NAR has a number of concerns. The bill does not provide for a federal guarantee for a secondary mortgage market. The bill also contains significant changes to the FHA program that include income targeting, downpayment increases, and loan limit decreases. The bill does include some positive changes including language to fix the definition of fees and points in the ability to repay/qualified mortgage (QM) regulation so that consumers have more options when choosing a lender, and language related to mortgages seized under eminent domain.
In addition, Senate Banking Chairman Johnson (D-SD) and Ranking Member Crapo (R-ID) announced an outline for their own FHA reform bill. The bill is focused on solvency issues and does not include comprehensive reform. The bill is similar to the NAR-supported legislation that passed the House last year. They expect to introduce the legislation this week.
NAR will continue to work with Congress to pass responsible housing finance reform.