FHA, flood insurance bills up for House action
Sept. 10, 2012 – The House and Senate convene at 2 p.m. today, with action possible in the House on a bill to strengthen the Federal Housing Administration insurance fund and another to require a study of voluntary, community-based flood insurance options.
H.R. 4264, introduced by Rep. Judy Biggert, R-Ill., was passed by the House Financial Services Committee in March. Titled the FHA Emergency Fiscal Solvency Act, the measure would cap the minimum annual mortgage insurance premium at 2 percent; bar abusive lenders; strengthen put-backs required for fraud losses; and improve the FHA’s financial controls and disclosure. Under an amendment during subcommittee mark-up, the measure also would require tracking of changes in servicing rights and require servicers to comply with FHA guidelines.
NAFCU has long supported FHA’s important role in the housing market and is following the progress of H.R. 4264 and other legislation for its impact on credit unions. It has also urged lawmakers to review FHA’s policies with respect to strategic mortgage defaults and to consider measures that would discourage defaults by homeowners who can afford to repay their loans.
Earlier this year, FHA Acting Commissioner Carol Galante told Rep. Brad Sherman, D-Calif., during a hearing that she agreed there should be a discussion about consistency. Borrowers that strategically default on an FHA-backed loan can’t get another one for three years; the lockout period is seven years at Fannie Mae. (Both are slated to speak at NAFCU's Congressional Caucus in Washington this week.)
H.R. 6186, introduced by Rep. Gwen Moore, D-Wis., would require a study of voluntary community-based flood insurance options and how they could be incorporated into the National Flood Insurance Program. It’s cosponsored by Biggert, House Financial Services Chairman Spencer Bachus, R-Ala., and Rep. Maxine Waters, D-Calif., ranking member of the Subcommittee on Capital Markets and Government Sponsored Enterprises.