Senate Bill 1376, A bill to improve the Federal Housing Administration and to ensure the solvency of the Mutual Mortgage Insurance Fund, has been passed out of the Senate Banking Committee on a nearly unanimous vote. The bill, proposed by Banking Committee Chairman Tim Johnson (D-SD) and Mike Crapo (R-ID) would raise the minimum capital reserves ratio of the Federal Housing Administration's to 3 percent, require minimum annual mortgage insurance premiums for the FHA guarantee and annual reassessment of those fee levels, and give the agency more enforcement tools to use in dealing with lenders.
The bill passed the committee by a vote of 21 to 1 with Tom Coburn, (R-OK) the only dissenting vote. If it passes the full Senate it will then probably have to be reconciled with a housing bill sponsored by Jeb Hensarling (R-TX), the chair of the House Financial Services Committee, that has as its centerpiece the liquidation of Freddie Mac and Fannie Mae. Hensarling's legislation would also limit government guarantees to those issued by FHA, eligibility for which would also be further restricted.
Johnson said, "This bill will give the Federal Housing Administration the tools it needs to get back on track, so it can continue to help qualified borrowers realize the dream of homeownership and provide stability to the housing market in times of stress. This was a bipartisan effort from start to finish. The reforms we approved today are the product of a lot of hard work from members on both sides of the aisle, and I appreciate the spirit of bipartisanship and open debate that my colleagues on the Committee demonstrated throughout the amendment process."