The House passed the Federal Housing
Administration Fiscal Solvency Act Tuesday by a vote of 407 to 7. The act, as introduced by Representative Judy
Biggart (R-IL) authorizes the Department of Housing and Urban Development (HUD)
to establish and collect additional annual premium payments for the first 11
years of the term of an insured mortgage in an amount between 0.55 percent and
2 percent of the remaining insured principal balance for certain periods. It also increases for 1.55 percent to 2.05
percent the 30-year annual premium for an insured mortgage whose original
principal obligation exceeds 95 percent of the remaining principal balance.
It
also authorizes the Secretary to
terminate the approval of the mortgagee to originate or underwrite single
family mortgages for more than one area or on a nationwide basis, if the
mortgagee has an excessive rate of early defaults and claims.
Acting FHA Commissioner Carol Galante
said "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. 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.