The Insurance, Housing and Community Opportunity Subcommittee of the House Financial Services Committee has approved a bill that addresses the financial health of the Federal Housing Administration's (FHA) Mutual Mortgage Insurance Fund (MMIF).
The FHA Emergency Fiscal Solvency Act is designed to strengthen the MMIF by establishing minimum annual premiums for mortgage insurance. The bill prevents ‘unscrupulous lenders’ from participating in the program and requires repayment of losses to the FHA by lenders that committed fraud. The bill also seeks to improve the FHA's internal financial controls, transparency and disclosure requirements.
‘The FHA's cash reserves are down to dangerous levels, and taxpayers cannot afford another Fannie- and Freddie-style bailout,’ says Rep. Judy Biggert, R-Ill. ‘This administration needs to enforce stronger standards and create room for the private sector to replace taxpayers as the primary source of funding. The FHA is facing an urgent fiscal crisis, and this proposal gives [U.S. Department of Housing and Urban Development] Secretary Donovan emergency tools to wind down the risk before it's too late.’
The subcommittee also approved two additional bills: the Affordable Housing and Self-Sufficiency Improvement Act, which is designed to improve the efficiency and operations of the Section 8 housing voucher program; and the Homeless Children and Youth Act, which seeks to standardize the conflicting definitions of ‘homeless person’ in order to enable homeless children and youth to receive needed housing assistance. All three bills were approved by voice votes.