In order to fund planned technology investments in the Federal Housing Administration, a per-loan fee on newly originated mortgages is being proposed.
In prepared testimony, Department of Housing and Urban Development Secretary Dr. Ben S. Carson talked about the outdated technology at FHA.
Carson, who was scheduled to speak
Thursday before the Senate Committee on Banking, Housing and Urban Affairs, noted that FHA is operating on a mainframe that is over four decades old.
“Staff at our homeownership centers still work on paper case files, which not only presents inefficiencies, but also poses numerous issues for quality control,” he said.
So HUD is proposing up to $20 million to fund improvements to FHA’s single-family technology. The investment is expected to enable the agency to better interact with a modern financial system.
To help pay for the investment, HUD has proposed in its budget to charge fee of as much as $25 per loan. The fee
would apply on a prospective basis and expire after four years.
“It will take the cooperation of government and private sector lenders to make this needed investment, but I am certain it is one that will lead to mutually beneficial outcomes,” Carson stated.