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FHA Reform Moving Right Along

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One day after the Fed cut rates and the House of Representatives approved FHA Reform, the Senate Banking Committee approved legislation that would expand the ability of the FHA to insure mortgages, including higher-risk borrowers.

"The Senate Banking Committee's passage of the Building American Homeownership Act of 2007 will offer home buyers a safer alternative to riskier mortgage products and will help many homeowners who may be facing foreclosures," said NAR President Pat V. Combs.



Yesterday the House of Representatives passed H.R. 1852, the 'Expanding American Homeownership Act', by a vote of 348 to 72.

"This bill is an important step forward to address problems in the subprime mortgage market and help creditworthy borrowers to obtain home loans at prices and terms they can afford," said NAHB President Brian Catalde, a home builder from El Segundo, Calif.

Rising home prices and competeing subprime mortgage products have eaten away at FHA market share. FHA's share of the mortgage market fell from 18 percent in 1990 to less than 4 percent in 2006.

Next the legislation passed by the Senate Banking Committee moves to the Senate. If passed, the House and Senate will have to compromise on a the bill that will eventually be sent to President Bush, who has stated that he wants FHA Reform.

Posted Sep 19 2007, 07:00 AM
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Comments

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richard real
on Wed, Sep 19 2007 7:00 AM
I hope this bill comes in time to help me. I am 70 years old and paying $5775 per month at 9.37% because of a refinance that was shoved down my throat. This loan was total elder abuse.
Donna
on Wed, Sep 19 2007 7:00 AM
If this bill allows a 125% LTV, as was indicated to me in the NAR mailing I received about this bill, it would effectively move sub prime from the backs of hedge fund owners and banks, to the US taxpayers. Using tax payer backed loans to "bail out" the mortgage market seems like a very unwise decision. If FHA had been participating in the current sub prime debacle, we'd be in much more trouble than we already are. This is a short sighted solution with long term consequences.
TC
on Fri, Sep 21 2007 7:00 AM
One of the problems with the bill is that it will allow Mortgage Broker's easier entrance into FHA originating. That is one of the things that got the Real Estate Market into trouble. Any Joe with a heartbeat could get licensed to originate mortgages. Now FHA is following suit and easing the once tough qualifications to originate FHA mortgages. It'd be nice if people that were experts in the industry got to make the rules instead of the suits in Washington. But oh well.
Joe Kamenar
on Fri, Sep 21 2007 7:00 AM
In many parts of the country, FHA is not a viable option due to the maximum cap on loans of $417,000 that the FHA will purchase. Until that cap is raised to reflect the cost of housing on the West Coast, Metro DC, and other high-cost areas, there will be no alternative for subprime borrowers. Also, the FHA loans will not be of the stated income "liar loans" type that got the lenders into trouble. They would require proof of income and the ability to pay back the loan.
Edward Olssen
on Sat, Sep 22 2007 7:00 AM
Will this new FHA 'overhaul' help those homeowners who have been, or are 30,60, or 90 days delinquent? So far, FHA cannot help those people. They are the ones who could really use the help!
Wade
on Sun, Sep 23 2007 7:00 AM
My earlier comments about brokers should be able to originate FHA loans were to TC, so sorry Edward. But Edward, FHASecure will help those people you are worried about.
Wade
on Sun, Sep 23 2007 7:00 AM
Edward O. would rather brokers be DENIED the ability to originate FHA loans, even though his "trusted" banks are still the ones Underwriting ALL of the broker's loans. Why be afraid of who is originating it? Allow only the rich brokers the option to do FHA loans? Talk about easy entrance, there are NO mandated requirements for the bank and credit unions originators. Brokers do have requirements. And as far as who started the mess: Real Estate Agents set the price on the listing.
john
on Mon, Sep 24 2007 7:00 AM
We are supposed to believe elder abuse because you refinanced a 600k loan? Seriously? There are people in much worse shape than you richard "real".
ahab
on Tue, Sep 25 2007 7:00 AM
It seems to me to be another way to bail out the rich. Leave it to ol' W to help out and require another help for his friends in Texas. I don't care what person we get for president, it will take the next 20 years to recover from what Bush is doing to the average taxpayer. I will grant you the last presidents didn't spend a whole lot on the average American, but now the average American will be watching their great-grandchildren pay for Bush being in office. Way to go Bush!
giant
on Tue, Sep 25 2007 7:00 AM
please....it is not only mortgage broker's that have to be weeded out, but real estate personals doing all the pressure to client's to buy bigger homes than they can actually afford.
Brian Margulies
on Wed, Sep 26 2007 7:00 AM
For those that think mortgage brokers are "all bad" you are quite ignorant. To say that the FHA approval requirements should remain the same is foolish. I own a small brokerage that primarily originates A-Paper. Due to my company size and the huge cost of a full blown audit, FHA has been a pipe dream. With the new reform, my company will soon be able to get approved FHA and help hundreds of borrowers that cannot be helped right now. We don't charge 8pts so we can have the cash for FHA.
Tom
on Wed, Sep 26 2007 7:00 AM
Wade, real estate professionals DON'T set the price on a listing. The real estate market and the owner set the price. Don't shoot the messenger.
Pete
on Thu, Sep 27 2007 7:00 AM
Real estate agents do NOT set prices, they show clients what similar homes have sold for and let the Buyer or Seller decide what the price should be. If your agent isn't doing this, find another agent. I have never pressured a client into buying a home. I am not selling cars or shoes or some other commodity. Buying a home is an emotional decision, you either love it or you don't. I can't talk you into loving a home. Get loan approved first and house-hunt within your budget limits, be smart!
JD Rawcliffe, Esq.
on Thu, Sep 27 2007 7:00 AM
To Joe Kamenar, Whoever got you that loan at 9+% helped themselves, not you! Suggest you go to the AARP website and find out about reverse mortgages. They are available to seniors REGARDLESS OF CREDIT RATING OR INCOME (your interest rate suggests you have credit problems), because there are NO payments. The mortgage is paid off after your death. Check it out, and sorry you were victimized. You should report the lender or broker to your state's banking dept. Good luck! JD Rawcliffe, Esq.
Brent
on Tue, Oct 2 2007 7:00 AM
It is not Mortgage Brokers who caused this mess. It was the lenders offering a loan to anyone who was breathing basically.
Don
on Fri, Oct 5 2007 7:00 AM
I really would like to take a moment and add my comment to the many that have been posted here although I'm not sure I know the original premise,but based on the comments made there seems to be a plenty of various and astute people able to give professional advice. Although I'm sure there is plenty of blame to spread in this meltdown. The issues aren't to be simply divided and broken down exclusively unto themselves but look to your heart and tell me that good old fashion greed wasn't presen
Alan
on Tue, Oct 16 2007 7:00 AM
With all due respect to Tom, I disagree. Though there are many conciencious brokers, there are many slimey ones who are salivating at the thought of easier access to FHA loans. They are even advertising that they will shift sub-prime borrowers to FHA. Encouraging them with no audits or net worth requirements is inviting a flood of bad loans into FHA. Brokers with no "skin in the game" have no business in this arena. It is a shame that the dishonest make life hard for people like Tom.
Mack
on Thu, Dec 13 2007 8:00 AM
You try opening a mortgage broker firm with "no skin in the game". Beyond the thousands of $$ it takes to actually open, recruit, brand & run a business, its hundreds of hours of busting *** just to establish yourself. The $10K plus to have a government approved CPA bless our financials is just insane. Lets be honest, you don't want the approval reform because it creates more competition, & you're afraid of someone else doing it better than you & offer the product at a better rate/price.
paul pancher
on Mon, Feb 11 2008 8:00 AM
how does this effect reverse mortgages
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