Senators Johnson, Crapo Strike Agreement On Proposed FHA Reforms

Posted by Patrick Barnard on July 12, 2013 No Comments
Categories : Residential Mortgage

Two key members of the Senate Banking Committee have reportedly struck an agreement on legislation to overhaul the Federal Housing Administration (FHA).

Sen. Tim Johnson, D-S.D., chairman of the committee, and ranking member Sen. Mike Crapo, R-Idaho, announced the agreement Friday but did not give any details. They are expected to provide more information next week, according to a statement on the NAFCU website.

‘After months of hard work we have reached bipartisan agreement on a path forward to give the FHA the tools it needs to get back on stable footing,’ Johnson and Crapo wrote. ‘We believe we have found solid common ground and are optimistic that we will be able to move this bipartisan legislation forward expeditiously.’

Johnson and Crapo said the Banking Committee agreed earlier this year to address the FHA financial issues before tackling housing finance reform legislation.

Meanwhile a housing finance reform bill introduced in the House yesterday by Republican leaders of the House Financial Services Committee includes proposed changes to the FHA's structure.

The proposed Protecting American Taxpayers and Homeowners (PATH) Act, spearheaded by House Financial Services Committee Chairman Jeb Hensarling, R-Texas, aims to create a sustainable housing finance system by ending the taxpayer-funded bailout of government-sponsored enterprises Fannie Mae and Freddie Mac, liquidating them within five years, increasing competition in the housing finance market and providing consumers with more mortgage products to choose from.

The bill proposes to spin-off the FHA from the Department of Housing and Urban Development, as well as to limit the FHA's services to first-time and moderate-income borrowers.

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