April 2, 2012
The House Financial Services Committee passed H.R. 4264, the “FHA Emergency Fiscal Solvency Act of 2012 (PDF), introduced by Rep. Judy Biggert (R-IL). NAR supported the measure which strengthens FHA's financial solvency by barring unscrupulous lenders from participating in the program; allowing FHA to collect losses from lenders who made material errors in underwriting or committed fraud; and strengthens financial oversight and disclosure. The bill will also give FHA flexibility to increase premiums, if needed to restore reserve levels.
NAR was successful in defeating amendments to mandate increased premium levels and reduce the federal guarantee on loans. Previous versions of the bill (which NAR opposed) also included increases to the downpayment requirement, eliminated the loan limit floor, and eliminated the cap on premium increases. Given the concerns about FHA's overall fiscal stability, this bill balances the needs to protect the fund from taxpayer risk, with the need to continue to provide access to safe and affordable mortgage financing. There is not any plan for timing on the House Floor. There is not yet a companion in the Senate.
Read the NAR letter supporting the legislation (PDF)
Read the Coalition letter opposing amendments (PDF)