The United States House of Representatives will vote, next week, on H.R. 1852, the “Expanding American Homeownership Act of 2007.” This bill will reform FHA and help ease the fallout from the turmoil in the mortgage market.
The following are points that the bill will address…
Call for Action Talking Points H.R. 1852, the “Expanding American Homeownership Act of 2007”
H.R. 1852 modernizes the FHA mortgage insurance program, once again providing American homeowners with safe, affordable mortgage alternatives. Without reform, FHA would remain unavailable to many homebuyers or those needing to refinance.
FHA products are safe, thanks to appropriate underwriting and loss-mitigation programs, and fairly priced without resorting to teaser rates or negative amortization.
H.R. 1852 revitalizes FHA to compete in the 21st century housing market.
The legislation will:
– Use risk-based pricing for FHA products
– Eliminate the 3% downpayment requirement on FHA loans for first time homebuyers
– Increase the number of reverse mortgages that FHA can insure
– Streamline the FHA condominium loan program
– Increase the FHA loan limits nationwide and in high cost areas.
– Representatives Barney Frank (D-MA), Gary Miller (R-CA) and Dennis Cardoza (D-CA) will introduce an amendment to increase the FHA loan limits to 125%of the local median home price
– Additionally the Frank/Miller/Cardoza amendment will give the Secretary of Housing and Urban Development the flexibility needed to respond to changing market conditions.
– American homeowners, with subprime loans, are facing the prospect of dramatic increases in mortgage payments and an increasing risk of foreclosure, but cannot refinance.
– The proposed increase in the FHA loan limits will provide these homeowners with a safe, viable mortgage option.
– Instability in mortgage markets is not limited to subprime, the jumbo market is also affected.
H.R. 1852 will give homebuyers in high cost areas an affordable mortgage alternative to the now limited and significantly more expensive jumbo mortgage products.