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Acting Federal Housing Administration Commissioner Carol Galante has told Sen. Bob Corker, R-Tenn., that steps are being taken to strengthen the agency's financial position, including increased vigilance sought by NAFCU with respect to borrowers who have strategically defaulted on mortgages only to seek new ones.

"FHA is concerned that a few lenders are inappropriately advertising and soliciting borrowers with the false pretense that they can somehow ‘automatically' qualify after three years," wrote Galante, whose nomination to a term as FHA commissioner has been pending since 2011, in a letter this Wednesday to Corker. Corker welcomed Galante's plan for reform in this and other areas and said he would be comfortable supporting Galante's appointment.

Galante told Corker the FHA will step up enforcement over its lenders, subject borrowers to a stronger policy on credit scores and debt-to-income ratios and conduct more analysis to find out why a borrower defaulted. It also plans to structure a new housing counseling initiative that would apply to several borrower classifications (andwould also address borrowers with previous foreclosures), she said. These and other measures will be in place by Jan. 31, she wrote.

NAFCU has pressed the FHA to take another look at its three-year lockout period, which is much briefer than the seven-year lockout period in place at Fannie Mae and Freddie Mac. The association, in meetings with Galante and in correspondence with the agency and members of Congress, has urged against policies that may encourage borrowers to strategically default on their loans even if they have the means to repay them.

NAFCU President and CEO Fred Becker reiterated that call Dec. 11 in a letter to Corker and Sen. David Vitter, R-La., both of whom pressed the acting FHA commissioner on the issue in a recent Senate Banking Committee hearing.

• Galante's letter
• Corker's announcement
• "Becker says FHA lockouts warrant further review," 12/12