Jan. 31, 2013 – NAFCU lobbyists are staying close to key players in this year’s housing reform debate, which begins in earnest soon in a planned series of House Financial Services Committee hearings.
On Wednesday, House Financial Services Chairman Jeb Hensarling, R-Texas, said his panel will hold a series of hearings this year on the “financially troubled” Federal Housing Administration, its role in the housing finance market and “the need to create a sustainable mortgage finance system.”
“The FHA is broke – bailout broke,” Hensarling said. “We need a sustainable mortgage finance system that gives hard-working Americans opportunities to buy homes they can actually afford to keep.”
FHA’s Mutual Mortgage Insurance Fund is valued at a negative $16.3 billion, according to the Department of Housing and Urban Development, but insures more than $1 trillion worth of home mortgages. Hensarling notes that if the FHA stopped writing new business today, it could not cover the losses anticipated on loans it has already insured.
Housing reform is on NAFCU’s list of top priorities for 2013. The association is working to ensure credit unions’ continued access to an impartial secondary market for mortgage loans.
NAFCU is also concerned about the health of the FHA Mutual Mortgage Insurance Fund and has communicated that to FHA Commissioner Carole Galante. While understanding the need for action, it doesn't want access to FHA loans to become unduly difficult. Meanwhile, Galante has announced a series of changes aimed at strengthening the FHA and insurance fund. (See story.)
Of the hearings ahead, Hensarling said the first two are slated Feb. 6 and 13 before the full committee. The first will include testimony from housing finance experts on the FHA’s financial condition and its role in the market. The second will include testimony from Galante on the MMIF’s possible need for a taxpayer bailout. Hensarling said there will be additional hearings in the spring.