Sept. 12, 2012 – The House yesterday approved H.R. 4264, a bill that would raise the cap on Federal Housing Administration mortgage insurance premiums from 1.5 percent to 2 percent a year and make other program changes to strengthen the FHA mortgage insurance fund.
The FHA Emergency Fiscal Solvency Act, introduced by Rep. Judy Biggert, R-Ill., would also set a minimum annual insurance premium of 0.55 percent; bar abusive lenders from participating in the program; require repayment of losses to the FHA by lenders that commit fraud; and improve FHA’s internal financial controls, transparency and disclosure requirements.
NAFCU is monitoring progress on this bill for its impact on credit unions. It is also continuing to advocate that the FHA revisit its policy on strategic defaults to bring it more in line with the one in place at Fannie Mae. 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. The association supports discouraging the use of strategic default by homeowners who can afford to repay their mortgage loans.
The House yesterday also approved H.R. 6186, which requires the Federal Emergency Management Agency to conduct a study of voluntary community-based flood insurance options and how they could be incorporated into the National Flood Insurance Program. The bill was introduced by Rep. Gwen Moore, D-Wis., and 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.
H.R. 4264 was approved on a vote of 402-7. H.R. 6186 was approved by voice vote. Both await action of the full Senate.