Senate Moves FHA Reform Legislation to Help Homeowners
Washington, DC -- The National Assn. of REALTORS commended Senate Banking Chairman Christopher Dodd, D-Conn., Sen. Mel Martinez, R-Fla., and Sen. Richard Shelby, R-Ala., for their demonstrated leadership in protecting the interests of America’s current and future homeowners by passing FHA reform legislation today.
"The Senate Banking Committee's passage of the Building American Homeownership Act of 2007 will offer home buyers a safer alternative to riskier mortgage products and will help many homeowners who may be facing foreclosures," said NAR President Pat V. Combs. "As the leading advocate for expanding homeownership opportunities and protecting consumers in the real estate transaction, NAR applauds this progress."
"As adjustable subprime loans reset, some homeowners are faced with payments they can no longer afford," said Combs, of Grand Rapids, MI and vice president of Coldwell Banker-AJS-Schmidt. "A reformed FHA is positioned to provide a safer mortgage alternative for borrowers and help bring stability to local markets and economies."
NAR has long supported FHA modernization legislation that would increase loan limits, reduce or eliminate the statutory three percent minimum cash down payment, allow FHA increased flexibility and give the agency the ability to streamline certain programs, in addition to strengthening its loss mitigation program.
"FHA can once again lead the way in providing safe loan products and preventing foreclosures by authorizing lenders to help borrowers who are in default. This will make a substantial difference for many families that may otherwise face foreclosure," Combs said.
NAR is especially pleased with the increase in FHA mortgage loan limits. "This will help first-time home buyers, minority buyers, and others who could not qualify for conventional mortgages. Increased loan limits will also help people living in high-cost areas, because low FHA limits currently make FHA-insured mortgages unavailable to many of these families," said Combs.
"The universal and consistent availability of FHA loan products has made mortgage insurance accessible to individuals regardless of their race, ethnicity or social status during periods of prosperity and economic depression, allowing higher risk, yet creditworthy borrowers to get prime financing," Combs said. "A strong and viable FHA is important to a robust and vital housing market. The Senate Banking Committee took quick action today in passing this important legislation, after the full House passed FHA reform legislation yesterday. We are hopeful that both Houses of Congress will meet soon to finalize and enact FHA reform this year."