A proposed law that would strengthen the Federal Housing Administration has made it out of a U.S. Senate committee — a development that was lauded by mortgage bankers.
Earlier this month, the Senate Banking Housing and Urban Affairs Committee released details on the proposed legislation known as S. 1376, the FHA Solvency Act of 2013.
Among other things, the bill would raise the caps on FHA mortgage insurance premiums, impose Qualified Mortgage standards on FHA-insured loans and expand the scope of indemnification and mortgagee termination.
On Wednesday, the committee approved the proposed law by a vote of 21 to one.
Included in the approved bill was a manager’s amendment incorporating more proposals.
“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,” Sen. Tim Johnson (D-S.D.), who is chairman of the committee, said in a news release. “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.”
Johnson and Sen. Mike Crapo (R-Idaho) sponsored the bill.
Mortgage Bankers Association President and Chief Executive Officer David H. Stevens issued a statement applauding the Senate committee for passing the bill.
“We believe this bill contains many common sense reforms that will help shore up FHA’s finances and ensure the agency continues to fulfill its traditional counter cyclical role,” Stevens stated.
Stevens went on to say that Johnson and Crapo reconfirmed that the committee will turn its focus to secondary mortgage market reform.
