House Subcommittee Marks Up FHA Fiscal Solvency Bill

On Tuesday, February 7, the House Financial Services Committee’s Subcommittee on Insurance, Housing, and Community Opportunity marked up a draft bill designed to help ensure the fiscal solvency of the Federal Housing Administration’s (FHA) single-family mortgage insurance program.  The legislation is intended to reduce the risk that the FHA could require a taxpayer bailout.

The draft bill would bar lenders with high rates of early default or insurance claims from originating or underwriting FHA-insured loans, require fraudulent lenders to repay losses on improperly underwritten FHA-insured loans, authorize FHA to increase mortgage insurance premiums, and strengthen FHA’s internal financial controls, transparency, and disclosure requirements.

NCSHA and several HFAs asked the Subcommittee to incorporate into the bill NCSHA’s proposal authorizing Ginnie Mae to securitize FHA-HFA Multifamily Risk-Sharing Program loans, but the Subcommittee leadership rejected the amendment because they want to limit the scope of the bill to the FHA’s fiscal solvency and single-family issues.

Subcommittee Chair Judy Biggert (R-IL) said during the markup that the Financial Services Committee may mark up the bill by the end of February.

For more information, please contact Ellen Lurie Hoffman.