|House Approves FHA Reform Act|
June 10, 2010
WASHINGTON, D.C. - Congressman André Carson today voted to approve legislation to help the Federal Housing Administration (FHA) continue its work to insure mortgage loans and expand homeownership opportunities.
The FHA Reform Act of 2010 allows FHA to adjust its premium structure for new borrowers while still providing affordable mortgage insurance to individuals, including low-income and minority borrowers in traditionally underserved areas.
"At the height of the mortgage crisis two years ago, FHA loans accounted for just five percent of all new loans nationwide," said Congressman Carson. "Since that time FHA has seen its loan volume increase significantly to 30 percent in the 2009 fiscal year.
"That influx, combined with the economic crisis and declining home prices, has caused FHA's capital reserves to decline. This legislation will ensure that FHA continues to fill the vital role in our nation's economy that has helped 37 million Americans attain homeownership since its creation in 1934."
Along with improving FHA's financial position, the bill will reduce federal spending and save taxpayers $2.5 billion over five years.
The legislation also provides FHA with the authority to crack down on fraudulent lenders and those violating its loan requirements. It requires FHA to improve its internal reporting systems to better manage risk and to provide transparent data to the public and to Congress. FHA has already taken administrative and regulatory steps to improve risk management and remove individuals who have improperly taken advantage of the program.
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