March 14, 2013
Congresswoman Maxine Waters, Ranking Member of the House Committee on Financial Services, reintroduced the FHA Emergency Fiscal Solvency Act. The legislation, co-sponsored by Representative Michael E. Capuano, Ranking Member of the Subcommittee on Housing and Insurance, is designed to strengthen FHA and to help ensure its long-term solvency.
In recent years, the agency has stepped into the void, providing crucial liquidity as private firms have retreated from writing mortgage insurance policies, particularly for key groups such as first time homebuyers.
The provisions of the bill give FHA more flexibility to take action against loan originators who engage in faulty underwriting or who have high loan losses. Additional measures include authorizing the agency to require indemnification for improperly written loans.
In reintroducing the bill, Ranking Member Waters said “This legislation takes an important step towards improving the financial stability of the FHA. Over 400 members of the House voted for an identical bill last Congress, which was drafted in the Financial Services Committee in a collaborative manner and on a bipartisan basis. Working with the Administration, we plan on drafting additional legislation to give FHA more tools to bolster its insurance fund. But this is an important first step, and should be considered immediately, given that it was supported on such an overwhelming, bipartisan majority in the last Congress. It is time to move beyond discussion of this issue and take action.”
Congressman Capuano said “The House passed legislation reforming the Federal Housing Administration last year with the bipartisan support of 402 Members. There is clear agreement on the need to provide the FHA with additional risk management tools, increased transparency and enhanced reporting requirements. Let's move forward now with what we agree on and work together to make additional improvements” stated Congressman Mike Capuano.
Alison M. Mills (Rep. Capuano) 617-621-6208