Last Thursday the U.S. House of Representatives passed the FHA Reform Act, establishing some new Federal Housing Administration (FHA) regulations and authorities. The bill will strengthen FHA’s capital base by raising mortgage insurance premiums, and will crack down on FHA-approved lenders.
According to a statement released by House Democrats, the reforms outlined in the bill will “rebuild the American dream of homeownership,” while reducing federal spending by $2.5 billion over the next five years and holding FHA accountable.
The FHA Reform Act is supported by a wide coalition of organizations, including the National Association of Realtors, Mortgage Bankers Association, and National Association of Home Builders.
Robert E. Story, Jr., CMB, chairman of the Mortgage Bankers Association, commented, “The reforms contained in this bill will help stabilize FHA’s finances by allowing the agency to raise its annual premiums and better take corrective action against lenders who are putting the program at risk.