House Financial Services Subcommittee Marks Up FHA Emergency Fiscal Solvency Act
At a House Financial Services Subcommittee on Insurance, Housing and Community Opportunity hearing on February 7, members approved by a voice vote a discussion draft of a bill shoring up the Federal Housing Administration (FHA) mortgage insurance fund.
The Subcommittee approved a draft of the FHA Emergency Fiscal Solvency Act, which aims to strengthen the Mutual Mortgage Insurance Fund by establishing minimum annual premiums for mortgage insurance; barring unscrupulous lenders from participating in the program; requiring repayment of losses to FHA by lenders who committed fraud; and improving the FHA’s internal financial controls, transparency, and disclosure requirements.
There were no opening statements on the bill.
Five amendments were considered and four were approved.
Waters Amendment #1 – Approved by voice vote
Rep. Maxine Waters’ (D-Calif.) amendment would require FHA to be notified when one of its mortgagees stops doing business with another mortgagee because it engages in fraud.
Waters called it “one more tool in the FHA’s arsenal to detect fraud.”
Stivers Amendment #1 – Approved by voice vote
Rep. Steve Stivers (R-Ohio) amendment would clarify FHA indemnification determinations should be considered only when there are serious offenses and also allows lenders to know what material violations are. It also establishes an appeals process in HUD to allow lenders to appeal indemnification determinations.
Waters Amendment #2 – Approved by voice vote
The amendment would require the HUD Secretary to conduct a study of the compliance with the loan servicing, loss mitigation, and insurance claim submission guidelines of the FHA mortgage insurance programs under the National Housing Act, and the annual costs to the Mutual Mortgage Insurance Fund, since 2008, resulting from any failures by mortgage servicers to comply with such guidelines.
Garrett Amendment #1 – Ruled not germane
Garrett Amendment #2 – Approved 7 to 4
Rep. Scott Garrett’s (R-N.J.) amendment would require the HUD Secretary to shall develop, submit to Congress on a biweekly basis, and commence implementation of an emergency capital plan for the restoration of the fiscal solvency of the Mutual Mortgage Insurance Fund. Additionally, the amendment would require the Treasury Secretary to provide for an independent third party to conduct a review of the mortgage insurance programs and funds of the HUD Secretary and on the financial safety and soundness of such programs and funds, and the extent of loan loss reserves and adequacy of such programs and funds. The report would need to be conducted in accordance with generally accepted accounting principles (GAAP).
For a webcast of the markup, please click here.
At a House Financial Services Subcommittee on Insurance, Housing and Community Opportunity hearing on February 7, members approved by a voice vote a discussion draft of a bill shoring up the Federal Housing Administration (FHA) mortgage insurance fund.
The Subcommittee approved a draft of the FHA Emergency Fiscal Solvency Act, which aims to strengthen the Mutual Mortgage Insurance Fund by establishing minimum annual premiums for mortgage insurance; barring unscrupulous lenders from participating in the program; requiring repayment of losses to FHA by lenders who committed fraud; and improving the FHA’s internal financial controls, transparency, and disclosure requirements.
There were no opening statements on the bill.
Five amendments were considered and four were approved.
Waters Amendment #1 – Approved by voice vote
Rep. Maxine Waters’ (D-Calif.) amendment would require FHA to be notified when one of its mortgagees stops doing business with another mortgagee because it engages in fraud.
Waters called it “one more tool in the FHA’s arsenal to detect fraud.”
Stivers Amendment #1 – Approved by voice vote
Rep. Steve Stivers (R-Ohio) amendment would clarify FHA indemnification determinations should be considered only when there are serious offenses and also allows lenders to know what material violations are. It also establishes an appeals process in HUD to allow lenders to appeal indemnification determinations.
Waters Amendment #2 – Approved by voice vote
The amendment would require the HUD Secretary to conduct a study of the compliance with the loan servicing, loss mitigation, and insurance claim submission guidelines of the FHA mortgage insurance programs under the National Housing Act, and the annual costs to the Mutual Mortgage Insurance Fund, since 2008, resulting from any failures by mortgage servicers to comply with such guidelines.
Garrett Amendment #1 – Ruled not germane
Garrett Amendment #2 – Approved 7 to 4
Rep. Scott Garrett’s (R-N.J.) amendment would require the HUD Secretary to shall develop, submit to Congress on a biweekly basis, and commence implementation of an emergency capital plan for the restoration of the fiscal solvency of the Mutual Mortgage Insurance Fund. Additionally, the amendment would require the Treasury Secretary to provide for an independent third party to conduct a review of the mortgage insurance programs and funds of the HUD Secretary and on the financial safety and soundness of such programs and funds, and the extent of loan loss reserves and adequacy of such programs and funds. The report would need to be conducted in accordance with generally accepted accounting principles (GAAP).
For a webcast of the markup, please click here.