The House of Representatives offered a relatively rare display of bipartisanship in its 402-7 passage of the Federal Housing Administration (FHA) Fiscal Solvency Act of 2012.
The Fiscal Solvency Act seeks to strengthen and broaden the ability of the U.S. Department of Housing and Urban Development (HUD) to avoid or recoup losses for loans originated or underwritten by a mortgage lender that did not comply with FHA guidelines, as well as expand HUD's ability to terminate the authority of poorly performing lenders to participate in FHA programs. Among the bill's provisions are the establishment of a minimum annual premium for mortgage insurance of 0.55% and a required repayment of losses to the FHA by lenders who committed fraud.
Rep. Judy Biggert, R-Ill., introduced the bill earlier this year before the House Subcommittee on Insurance, Housing and Community Opportunity, which she chairs. The subcommittee approved an initial draft on Feb. 7.
‘FHA's declining financial position could cost taxpayers millions, and it threatens the stability of our housing market,’ says Biggert. ‘We cannot afford another Fannie- and Freddie-style bailout, and mortgage holders don't need any more market uncertainty driving down their home values.’
The FHA voiced its support for the bill's passage.
‘We are pleased that the bill passed by the House includes provisions that will allow FHA to continue its efforts to strengthen its enforcement capabilities in order to protect its insurance fund and American taxpayers,’ says Acting FHA Commissioner Carol Galante. ‘We look forward to continuing to work with both chambers to enact final legislation to provide FHA with the tools it needs to build on the vital reforms implemented by this administration.’