Feb. 7, 2011 – The House Financial Services Subcommittee on Insurance, Housing, and Community Opportunity is slated to mark up two housing-related bills today of interest to credit unions and NAFCU.
One bill deals with the Federal Housing Administration’s annual mortgage insurance premiums; another is aimed at streamlining affordable housing programs to increase flexibility when they are implemented at the local level. NAFCU has long supported the important role that FHA plays in our nation’s housing market and is following developments with these pieces of legislation.
In related action, NAFCU is urging lawmakers to review FHA’s policies with respect to strategic mortgage defaults. In a Feb. 3 letter to the FHA and HUD, NAFCU President and CEO Fred Becker called on the agencies to increase the current lockout period for FHA loans to those who strategically default on their home loans and implement other policies to discourage the practice.
Current FHA policy bars those who strategically default on their mortgages from securing another FHA loan for at least three years. Comparatively, Fannie Mae prohibits such borrowers from obtaining a Fannie-backed mortgage for seven years.
NAFCU believes that the HUD, FHA and the administration should leave no stone unturned in finding creative solutions to the housing crisis. While the association supports recently announced changes to FHA’s streamlining program that aim to address the housing crisis, it also believes that those with an ability to pay are not allowed to walk away from their homes.
To that end, Becker also recently called on the leaders of the House Financial Services Committee, the House Oversight and Government Reform Committee and the Senate Banking Committee to set hearings to examine the troubling trend of strategic defaults.
The letters went to House Financial Services Chairman Spencer Bachus, R-Ala., and Ranking Member Barney Frank, D-Mass.; House Oversight and Government Reform Chairman Darrell Issa, R-Calif., and Ranking Member Elijah Cumming, D-Md.; and Senate Banking Chairman Tim Johnson, D-S.D., and Ranking Member Richard Shelby, R-Ala.