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Showing posts with label FHA. Show all posts
Showing posts with label FHA. Show all posts
Tuesday, June 29, 2010
Friday, July 11, 2008
REMARKS BY HUD SECRETARY STEVE PRESTON DURING MEDIA TELECONFERENCE CALL TO DISCUSS FHASECURE EXPANSION AND PENDING CONGRESSIONAL LEGISLATION
Good morning. Thank you for phoning in. I wanted to join FHA Commissioner Brian Montgomery to talk about the next phase of FHASecure and discuss housing legislation pending before Congress.
As you know, in response to the housing crisis, FHA has expanded its mission to help more Americans facing foreclosure refinance into safer, more affordable mortgages. In late August 2007, President Bush introduced a new product called FHASecure for homeowners who were unable to make their mortgage payments after their interest rate reset. Since then, more than 260,000 families have refinanced with FHA. Hundreds of thousands more will refinance with FHA by the end of the year.
Starting on July 14th, FHASecure will begin to provide additional assistance to subprime borrowers with adjustable rate mortgages, and help to restore liquidity and stability to the markets. It will assist families who have missed up to three
monthly mortgage payments over the previous 12 months or have experienced temporary economic hardship, such as loss of overtime or medical needs, as well as those who were affected by payment shock. The expansion will also encourage lenders to voluntarily write down outstanding subprime mortgage principal.
We estimate this plan will help an additional 100,000 families refinance into more affordable FHA-insured loans by the end of the year.
The combination of all efforts under FHASecure will help a total of 500,000 families by year's end. Our monthly refinancings this fiscal year are already more than five times the level of 2006. It is clear people are coming to us as their solution for the future.
As part of this expansion, we are instituting a fairer, more flexible premium pricing structure at FHA. Like any other insurance company, FHA will begin pricing the insurance premiums for these borrowers according to their credit risk. This will eliminate a pricing inequity that treats applicants with a low risk of default the same as those with a high risk of default.
Risk-based pricing will benefit many borrowers, especially lower-income American families. In FHA's portfolio, families with the lower incomes actually have higher FICO scores. These are hard-working American families who live within their means and pay their bills on time. Pricing mechanisms should reflect that fact.
The bill currently moving through the Senate would place a moratorium on risk-based pricing. That would be a big mistake. FHA will have to increase premiums across the board on all borrowers or, alternatively, seek taxpayer funds in October to cover potential losses, or cut back on the program at the very time we are an island of hope for hundreds of thousands of Americans.
In addition to a possible moratorium on risk-based pricing, Congress may require FHA to accept mortgage insurance loans with seller-funded down payment assistance. The option for FHA not to insure such mortgages would be removed. This would not only be costly for FHA but could be expensive for taxpayers, too. Even if FHA raised premiums to a max of 2.25 percent upfront for all borrowers across the board, it would still need to seek an appropriation to cover the losses caused this practice.
We have issued a regulation to address seller-funded down payments. We are in a comment period right now, and I intend to look hard at those comments. Therefore, I do not want to discuss this matter in great detail. The comments are important to us and we will look at them carefully. But the reason for our efforts to regulate in this area is that FHA-backed mortgages with seller-funded down payments go into foreclosure at three times the rate of FHA's remaining portfolio. Because of a lack of equity, losses on these seller-funded down payment mortgages are significantly greater. We remain solvent and in good shape today. But no insurance company can continue to absorb losses of this magnitude.
At the end of the day, I hope reason will prevail. FHA is more important to the mortgage market now than it has been for many years. FHA's volume and market share continue to grow every month. I hope final legislation from Congress would put forward actions that can keep FHA solvent, self-financing, and responsibly able to help homeowners. Taxpayers should not have to absorb preventable, foreseeable losses.
We are looking for the Congress to pass responsible legislation that will help FHA continue to provide stability for the housing market and provide government-backed mortgages for low-and-moderate income families.
Thank you.
Posted Anthony Landaeta
http//anthonylandaeta.blogspot .com/
As you know, in response to the housing crisis, FHA has expanded its mission to help more Americans facing foreclosure refinance into safer, more affordable mortgages. In late August 2007, President Bush introduced a new product called FHASecure for homeowners who were unable to make their mortgage payments after their interest rate reset. Since then, more than 260,000 families have refinanced with FHA. Hundreds of thousands more will refinance with FHA by the end of the year.
Starting on July 14th, FHASecure will begin to provide additional assistance to subprime borrowers with adjustable rate mortgages, and help to restore liquidity and stability to the markets. It will assist families who have missed up to three
monthly mortgage payments over the previous 12 months or have experienced temporary economic hardship, such as loss of overtime or medical needs, as well as those who were affected by payment shock. The expansion will also encourage lenders to voluntarily write down outstanding subprime mortgage principal.
We estimate this plan will help an additional 100,000 families refinance into more affordable FHA-insured loans by the end of the year.
The combination of all efforts under FHASecure will help a total of 500,000 families by year's end. Our monthly refinancings this fiscal year are already more than five times the level of 2006. It is clear people are coming to us as their solution for the future.
As part of this expansion, we are instituting a fairer, more flexible premium pricing structure at FHA. Like any other insurance company, FHA will begin pricing the insurance premiums for these borrowers according to their credit risk. This will eliminate a pricing inequity that treats applicants with a low risk of default the same as those with a high risk of default.
Risk-based pricing will benefit many borrowers, especially lower-income American families. In FHA's portfolio, families with the lower incomes actually have higher FICO scores. These are hard-working American families who live within their means and pay their bills on time. Pricing mechanisms should reflect that fact.
The bill currently moving through the Senate would place a moratorium on risk-based pricing. That would be a big mistake. FHA will have to increase premiums across the board on all borrowers or, alternatively, seek taxpayer funds in October to cover potential losses, or cut back on the program at the very time we are an island of hope for hundreds of thousands of Americans.
In addition to a possible moratorium on risk-based pricing, Congress may require FHA to accept mortgage insurance loans with seller-funded down payment assistance. The option for FHA not to insure such mortgages would be removed. This would not only be costly for FHA but could be expensive for taxpayers, too. Even if FHA raised premiums to a max of 2.25 percent upfront for all borrowers across the board, it would still need to seek an appropriation to cover the losses caused this practice.
We have issued a regulation to address seller-funded down payments. We are in a comment period right now, and I intend to look hard at those comments. Therefore, I do not want to discuss this matter in great detail. The comments are important to us and we will look at them carefully. But the reason for our efforts to regulate in this area is that FHA-backed mortgages with seller-funded down payments go into foreclosure at three times the rate of FHA's remaining portfolio. Because of a lack of equity, losses on these seller-funded down payment mortgages are significantly greater. We remain solvent and in good shape today. But no insurance company can continue to absorb losses of this magnitude.
At the end of the day, I hope reason will prevail. FHA is more important to the mortgage market now than it has been for many years. FHA's volume and market share continue to grow every month. I hope final legislation from Congress would put forward actions that can keep FHA solvent, self-financing, and responsibly able to help homeowners. Taxpayers should not have to absorb preventable, foreseeable losses.
We are looking for the Congress to pass responsible legislation that will help FHA continue to provide stability for the housing market and provide government-backed mortgages for low-and-moderate income families.
Thank you.
Posted Anthony Landaeta
http//anthonylandaeta.blogspot .com/
Senate poised to pass housing bill
Foreclosure rescue bill takes big step forward. But all of measure's provisions aren't settled since the House wants to have another crack at it.
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: July 10, 2008: 4:03 PM EDT
NEW YORK (CNNMoney.com) -- The saga still isn't over, but after months of debate on Capitol Hill, the Senate seemed poised Thursday to finally pass a comprehensive housing and foreclosure prevention bill this week.
The measure, which would create a new government-backed foreclosure prevention program and strengthen oversight of Fannie Mae and Freddie Mac, still faces a likely final debate in the House.
The House passed a version of the bill in May and is expected to try to amend some Senate provisions to bring them closer in line with its bill. Any changes will need to be considered by the Senate.
That likely back-and-forth makes it uncertain when lawmakers will be able to send final legislation to President Bush for his consideration. Final passage of a package has been delayed for close to two months due to substantive disagreements as well as countless procedural delays.
On the Senate floor Thursday, one of the lead authors of the bill, Senate Banking Committee Chairman Christopher Dodd, D-Conn., lamented how long it has taken to move the bill through. "Candidly, we can't wait any longer."
Dodd cited the latest foreclosure data, released Thursday, showing 250,000 new foreclosure filings in June, up 53% from a year earlier.
"A lot of us hoped the market would take care of all of this and there would be light at the end of the tunnel," Dodd said. "[But now] the only light at the end of the tunnel is a train coming."
The omnibus housing package attempts to address the housing crisis in several ways. Among them is providing more relief for some borrowers facing foreclosure; increasing access to mortgages in higher-cost areas; modernizing the loan guidelines for the Federal Housing Administration (FHA); and more stringently regulating Fannie and Freddie, the government-sponsored enterprises that have taken a beating this week amidst concern over how well funded they are.
FHA role expansion. Under the Senate bill, the FHA could insure up to $300 billion in new 30-year fixed rate mortgages for at-risk borrowers if their lenders agree to write down their loan balances to 90% of the current appraised value of their homes.
Lenders would also agree to pay upfront fees to the FHA equal to 3% of a home's appraised value. Borrowers must agree to pay an annual premium to the FHA equal to 1.5% of their new loan balance and they must also agree to share with the government any profit they realize from selling or refinancing their home.
The cost of the new FHA program - which will only be in place for a few years - would be funded by fees from Fannie and Freddie. Thereafter those fees would finance an affordable housing trust fund also created by the bill. The House version of the bill calls for those fees to be used solely for affordable housing.
Create a new regulator for Fannie and Freddie. The GSEs, which grease the wheels of the housing market by guaranteeing the purchase and trade of mortgages, will get a new regulator under the bill. That regulator, among other things, will have a greater say over how well funded the agencies are - a major concern in the markets that has sent stocks in both companies plunging.
"We know they play a central role in our housing. We also know that together they owe over $5 trillion in debt, and they're thinly capitalized. The way to keep them [from getting into worse shape] is to create a strong regulator to make sure they're adequately capitalized," Sen. Richard Shelby, R-Ala., another key architect of the bill, said Thursday on the Senate floor.
While the Senate bill calls for the appointment of a new regulator to be made immediately, House Democrats want the appointment to be made 6 months from the date of enactment.
Raise conforming loan limits. The bill would permanently increase the cap on the size of mortgages guaranteed by Fannie and Freddie to $625,000 from $417,000. The FHA maximum loan limits for high-cost areas would also increase to $625,000. The House bill raises the limit at all three agencies to nearly $730,000.
Higher loan limits will make it easier for borrowers to get mortgages, because they're more likely to be traded if they are considered conforming.
Update FHA rules. The bill would update a number of rules for FHA loans. Among them, it would increase to 3.5% from 3% the down payment requirement for borrowers in FHA loans. And it would eliminate a program that has allowed sellers to provide down payment assistance.
The House bill had contained a modified form of the down payment assistance program.
The seller-funded program is largely the reason why the agency's reserve has fallen by $4.6 billion, according to congressional testimony of FHA Commissioner Brian Montgomery. Currently, that reserve is roughly $16.4 billion.
Provide housing-related tax credits. The Senate bill includes more than $14 billion in tax credits. One is an $8,000 tax refund for first-time home buyers. The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years by the buyer.
Help states buy foreclosed properties. Despite a White House veto threat, the Senate bill still contains a provision that would provide states with $4 billion to buy and fix up foreclosed properties.
The House is expected to debate whether or not the provision should stay and also whether it should be paid for by raising an equal amount of revenue elsewhere. If not, it could be considered emergency spending, in which case lawmakers would not have to compensate for the cost of the provision.
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: July 10, 2008: 4:03 PM EDT
NEW YORK (CNNMoney.com) -- The saga still isn't over, but after months of debate on Capitol Hill, the Senate seemed poised Thursday to finally pass a comprehensive housing and foreclosure prevention bill this week.
The measure, which would create a new government-backed foreclosure prevention program and strengthen oversight of Fannie Mae and Freddie Mac, still faces a likely final debate in the House.
The House passed a version of the bill in May and is expected to try to amend some Senate provisions to bring them closer in line with its bill. Any changes will need to be considered by the Senate.
That likely back-and-forth makes it uncertain when lawmakers will be able to send final legislation to President Bush for his consideration. Final passage of a package has been delayed for close to two months due to substantive disagreements as well as countless procedural delays.
On the Senate floor Thursday, one of the lead authors of the bill, Senate Banking Committee Chairman Christopher Dodd, D-Conn., lamented how long it has taken to move the bill through. "Candidly, we can't wait any longer."
Dodd cited the latest foreclosure data, released Thursday, showing 250,000 new foreclosure filings in June, up 53% from a year earlier.
"A lot of us hoped the market would take care of all of this and there would be light at the end of the tunnel," Dodd said. "[But now] the only light at the end of the tunnel is a train coming."
The omnibus housing package attempts to address the housing crisis in several ways. Among them is providing more relief for some borrowers facing foreclosure; increasing access to mortgages in higher-cost areas; modernizing the loan guidelines for the Federal Housing Administration (FHA); and more stringently regulating Fannie and Freddie, the government-sponsored enterprises that have taken a beating this week amidst concern over how well funded they are.
FHA role expansion. Under the Senate bill, the FHA could insure up to $300 billion in new 30-year fixed rate mortgages for at-risk borrowers if their lenders agree to write down their loan balances to 90% of the current appraised value of their homes.
Lenders would also agree to pay upfront fees to the FHA equal to 3% of a home's appraised value. Borrowers must agree to pay an annual premium to the FHA equal to 1.5% of their new loan balance and they must also agree to share with the government any profit they realize from selling or refinancing their home.
The cost of the new FHA program - which will only be in place for a few years - would be funded by fees from Fannie and Freddie. Thereafter those fees would finance an affordable housing trust fund also created by the bill. The House version of the bill calls for those fees to be used solely for affordable housing.
Create a new regulator for Fannie and Freddie. The GSEs, which grease the wheels of the housing market by guaranteeing the purchase and trade of mortgages, will get a new regulator under the bill. That regulator, among other things, will have a greater say over how well funded the agencies are - a major concern in the markets that has sent stocks in both companies plunging.
"We know they play a central role in our housing. We also know that together they owe over $5 trillion in debt, and they're thinly capitalized. The way to keep them [from getting into worse shape] is to create a strong regulator to make sure they're adequately capitalized," Sen. Richard Shelby, R-Ala., another key architect of the bill, said Thursday on the Senate floor.
While the Senate bill calls for the appointment of a new regulator to be made immediately, House Democrats want the appointment to be made 6 months from the date of enactment.
Raise conforming loan limits. The bill would permanently increase the cap on the size of mortgages guaranteed by Fannie and Freddie to $625,000 from $417,000. The FHA maximum loan limits for high-cost areas would also increase to $625,000. The House bill raises the limit at all three agencies to nearly $730,000.
Higher loan limits will make it easier for borrowers to get mortgages, because they're more likely to be traded if they are considered conforming.
Update FHA rules. The bill would update a number of rules for FHA loans. Among them, it would increase to 3.5% from 3% the down payment requirement for borrowers in FHA loans. And it would eliminate a program that has allowed sellers to provide down payment assistance.
The House bill had contained a modified form of the down payment assistance program.
The seller-funded program is largely the reason why the agency's reserve has fallen by $4.6 billion, according to congressional testimony of FHA Commissioner Brian Montgomery. Currently, that reserve is roughly $16.4 billion.
Provide housing-related tax credits. The Senate bill includes more than $14 billion in tax credits. One is an $8,000 tax refund for first-time home buyers. The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years by the buyer.
Help states buy foreclosed properties. Despite a White House veto threat, the Senate bill still contains a provision that would provide states with $4 billion to buy and fix up foreclosed properties.
The House is expected to debate whether or not the provision should stay and also whether it should be paid for by raising an equal amount of revenue elsewhere. If not, it could be considered emergency spending, in which case lawmakers would not have to compensate for the cost of the provision.
Wednesday, June 25, 2008
Down payment assistance to risky borrowers $300B Housing Rescue Plan Passes
Commentary By Anthony Landaeta Jr
Posted 06/24/07 http://anthonylandaeta.blogspot.com/
Why would the Government offer loans and down payment assistance to risky borrowers after the collapse of the banking industry, isn't that what got us into too this mess in the first place with 100% financing and adjustable rates. The Government not only what's us to bail out the Bank's that created this mess but they also want to provide $14.5 Billion in a array of Tax Breaks, including a credit of up to $8,000 for first-time homebuyers who buy in the next year. $8,000 Dollars is a lot of money, so if a borrower wants to purchase a home at $265,000 through the Federal Housing Administration (FHA/HUD) there are purchasing that home with no money down which would be 100% financing, FHA requires as much as 3% in down payment so we as tax payers get to help those folks purchase there Dream Home's without any savings. "This is the government at there best" leading the charge Christopher J. Dodd, D-Conn, Rep Pelosi, Nancy D-CA with a set of weak Republicans that have no backbone with low approval ratings.
At the Capitol statement by Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman, said the lending measure "would allow us to begin to put a tourniquet on the hemorrhaging of foreclosures in this country."
Dictionary meaning:
Tourniquet: Bandied Quick fix
Hemorrhaging: To lose (assets): a company that was hemorrhaging money.
Members of the Congressional Black Caucus call it unacceptable, arguing it doesn't do enough to address the needs of black Americans. (My be we should just give everyone homes for free)
"Owning a home is not a right, it has to be earned"
There estimated 400,000 distressed borrowers who otherwise would be considered too financially risky to qualify for government-insured, fixed-rate loans. The Government will aid these borrowers by allowing them to refinance there home into a FHA loan where the Government will share in the portion of any profits they make from selling or refinancing their properties in the future. " Your Tax dollars work "
This is why we need checks and balances on our government having a equal Balance of independent - Democrat - Republican senators will help to ensure bills like this won't go anywhere lets hope President Bush Veto's this bill we all know a President Obama would sign this Bill, and we all know this election belongs to Obama he will be the next President, with that said a Democratic House and Senate with a Democratic President only means a large creation of Government Programs with High Taxes for the next 4 to 8 years, so hold on to your wallets because there is a lot of needy people with there hands out that the democrats have to Feed.
Anthony Landaeta Jr
Posted 06/24/07 http://anthonylandaeta.blogspot.com/
Why would the Government offer loans and down payment assistance to risky borrowers after the collapse of the banking industry, isn't that what got us into too this mess in the first place with 100% financing and adjustable rates. The Government not only what's us to bail out the Bank's that created this mess but they also want to provide $14.5 Billion in a array of Tax Breaks, including a credit of up to $8,000 for first-time homebuyers who buy in the next year. $8,000 Dollars is a lot of money, so if a borrower wants to purchase a home at $265,000 through the Federal Housing Administration (FHA/HUD) there are purchasing that home with no money down which would be 100% financing, FHA requires as much as 3% in down payment so we as tax payers get to help those folks purchase there Dream Home's without any savings. "This is the government at there best" leading the charge Christopher J. Dodd, D-Conn, Rep Pelosi, Nancy D-CA with a set of weak Republicans that have no backbone with low approval ratings.
At the Capitol statement by Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman, said the lending measure "would allow us to begin to put a tourniquet on the hemorrhaging of foreclosures in this country."
Dictionary meaning:
Tourniquet: Bandied Quick fix
Hemorrhaging: To lose (assets): a company that was hemorrhaging money.
Members of the Congressional Black Caucus call it unacceptable, arguing it doesn't do enough to address the needs of black Americans. (My be we should just give everyone homes for free)
"Owning a home is not a right, it has to be earned"
There estimated 400,000 distressed borrowers who otherwise would be considered too financially risky to qualify for government-insured, fixed-rate loans. The Government will aid these borrowers by allowing them to refinance there home into a FHA loan where the Government will share in the portion of any profits they make from selling or refinancing their properties in the future. " Your Tax dollars work "
This is why we need checks and balances on our government having a equal Balance of independent - Democrat - Republican senators will help to ensure bills like this won't go anywhere lets hope President Bush Veto's this bill we all know a President Obama would sign this Bill, and we all know this election belongs to Obama he will be the next President, with that said a Democratic House and Senate with a Democratic President only means a large creation of Government Programs with High Taxes for the next 4 to 8 years, so hold on to your wallets because there is a lot of needy people with there hands out that the democrats have to Feed.
Anthony Landaeta Jr
Tuesday, June 17, 2008
NAHB Green Building Legislation Offers Incentives to Lenders
NAHB Green Building Legislation Offers Incentives to Lenders193 Views The National Association of Home Builders (NAHB) urged Congress this week to move forward on legislation to improve energy efficiency and sustainability in housing without driving costs above manageable levels.
Jerry Howard, NAHB executive vice president and CEO testified before a House Financial Services Committee hearing on H.R. 6078, the Green Resources for Energy Efficient Neighborhood Act (or the GREEN Act) of 2008.
NAHB has been involved in voluntary green building since the early 1990s. Currently, the association is working with the International Code Council to complete a rigorous standards-developing process that will produce the first standard approved by the American National Standards Institute (ANSI) for green residential construction and remodeling - the National Green Building Standard�.
The GREEN Act, sponsored by Rep. Ed Perlmutter, (D-CO) provides incentives to lenders to provide lower interest loans and other benefits to consumers who build, buy, or remodel their homes or businesses to improve energy efficiency.
In addition the law would require Fannie Mae and Freddie Mac to finance energy efficient and location efficient mortgages such as buildings located near mass transit.
In prepared remarks for the Committee, Rep Perlmutter said that his bill's goal is to create a market for energy efficient and location efficient mortgages by making the GSE's, FHA and HUD eager to collect them.
This would be accomplished by amending the charters for Fannie and Freddie to buy, sell, service and otherwise deal in energy and location efficient mortgages and amending the Home Mortgage Disclosure Act to require data information for the number of and dollar amount of mortgages of single-family and multi-family housing which meet these standards.
HR 6078 would also require the FHA to insure $1 billion worth of energy efficient homes.
NAHB's Howard spoke to the Committee about ways to improve sustainability and energy efficiency in housing while still supporting housing affordability.
"Because federal housing programs are such a critical component of the nation's housing system, NAHB believes that it is important to ensure that the incorporation of sustainable building practices for these programs is accomplished in a thoughtful and practical manner," said Howard. "Also, it is important to maintain a balance between the goals of affordable housing development and maximizing energy efficiency."
Howard cautioned that setting overly stringent standards or unrealistic goals could boost the cost of building affordable housing to a level that is not sustainable over the long term.
He urged the members of the committee to keep certain principles in mind as they worked to adopt green criteria for federally assisted housing programs:
Avoid naming specific green criteria in federal legislation that may seem sufficient today, but that could become quickly outdated or unworkable in the very near term.
Provide necessary resources, including the additional staff and technology needed to implement the programs, as well as appropriations to help support the additional costs of building green.
Structure new programs in a manner that allows them to be used easily with other housing programs without duplicative rules and regulations.
Provide financial and other incentives to developers and builders of affordable housing to help them meet and even exceed green building goals.
Work with builders, lenders, the GSEs, nonprofits, community groups, appraisers and others to develop attainable goals for supportive financing mechanisms such as energy-efficient and location-efficient mortgages as well as appraisal standards that appropriately recognize the value of green building.
Develop educational materials to communicate best practices and promote sustainable federally assisted housing.
Jerry Howard, NAHB executive vice president and CEO testified before a House Financial Services Committee hearing on H.R. 6078, the Green Resources for Energy Efficient Neighborhood Act (or the GREEN Act) of 2008.
NAHB has been involved in voluntary green building since the early 1990s. Currently, the association is working with the International Code Council to complete a rigorous standards-developing process that will produce the first standard approved by the American National Standards Institute (ANSI) for green residential construction and remodeling - the National Green Building Standard�.
The GREEN Act, sponsored by Rep. Ed Perlmutter, (D-CO) provides incentives to lenders to provide lower interest loans and other benefits to consumers who build, buy, or remodel their homes or businesses to improve energy efficiency.
In addition the law would require Fannie Mae and Freddie Mac to finance energy efficient and location efficient mortgages such as buildings located near mass transit.
In prepared remarks for the Committee, Rep Perlmutter said that his bill's goal is to create a market for energy efficient and location efficient mortgages by making the GSE's, FHA and HUD eager to collect them.
This would be accomplished by amending the charters for Fannie and Freddie to buy, sell, service and otherwise deal in energy and location efficient mortgages and amending the Home Mortgage Disclosure Act to require data information for the number of and dollar amount of mortgages of single-family and multi-family housing which meet these standards.
HR 6078 would also require the FHA to insure $1 billion worth of energy efficient homes.
NAHB's Howard spoke to the Committee about ways to improve sustainability and energy efficiency in housing while still supporting housing affordability.
"Because federal housing programs are such a critical component of the nation's housing system, NAHB believes that it is important to ensure that the incorporation of sustainable building practices for these programs is accomplished in a thoughtful and practical manner," said Howard. "Also, it is important to maintain a balance between the goals of affordable housing development and maximizing energy efficiency."
Howard cautioned that setting overly stringent standards or unrealistic goals could boost the cost of building affordable housing to a level that is not sustainable over the long term.
He urged the members of the committee to keep certain principles in mind as they worked to adopt green criteria for federally assisted housing programs:
Avoid naming specific green criteria in federal legislation that may seem sufficient today, but that could become quickly outdated or unworkable in the very near term.
Provide necessary resources, including the additional staff and technology needed to implement the programs, as well as appropriations to help support the additional costs of building green.
Structure new programs in a manner that allows them to be used easily with other housing programs without duplicative rules and regulations.
Provide financial and other incentives to developers and builders of affordable housing to help them meet and even exceed green building goals.
Work with builders, lenders, the GSEs, nonprofits, community groups, appraisers and others to develop attainable goals for supportive financing mechanisms such as energy-efficient and location-efficient mortgages as well as appraisal standards that appropriately recognize the value of green building.
Develop educational materials to communicate best practices and promote sustainable federally assisted housing.
Thursday, June 12, 2008
MBA: HUD and Federal Reserve Must Work Together on RESPA Reform
As a critical comment period for proposed reform to the Real Estate Settlement and Procedures Act by the U.S. Department of Housing and Urban Development expires today, the Mortgage Bankers Association on Thursday weighed in with a stern warning for HUD officials: work with the Fed on updating the Truth in Lending Act in conjunction with RESPA, or risk hopelessly bungling both.
MBA president and CEO Jonathan L. Kempner said that while the trade organization “applauded” HUD for its effort to re-define RESPA criteria, updating the Act needed to be part of a larger effort to simplify the overall origination process for consumers.
“Recent events demonstrate that borrowers also need additional clarity about the terms and cost of credit,which falls under the Fed’s responsibility under TILA,” said Kempner. “For that reason, we strongly believe that HUD should link its efforts with the Board of Governors of the Federal Reserve so that both agencies work together in a careful, coordinated and comprehensive manner to truly simplify and improve the mortgage process for consumers.”
Specifically, the MBA said it wants to see HUD and Fed officials produce a combined TILA and good-faith-estimate (GFE) form to replace current disclosures given to borrowers.
Related links:
read the MBA’s full letter to HUD
“The Board has already issued proposed new rules under TILA and the Home Ownership and Equity Protection Act (HOEPA) concerning the mortgage market generally and is expected tosoon embark on further reform efforts concerning TILA disclosures specifically,” wrote Kempner in a letter to HUD officials.
“HUD’s efforts should be linked to the Board’s efforts.”
While the MBA is pushing for a collaborative reform approach, HUD’s efforts to reform RESPA have come under much stronger fire from the National Association of Realtors and the American Land Title Association.
“We believe that RESPA reform cannot be resolved in one sweeping change without considering and appreciating the many moving parts of a residential real estate transaction,” ALTA president Gary Kermott said in testimony during a recent hearing at the House Committee on Small Business.
Among ALTA’s concerns are changes to RESPA procedures that it argues will result in more confusion, red tape and cost for people both buying and selling a home.
Kermott pointed to the imposition of responsibility on the closing agent to read and interpret the closing script on behalf of the borrowers as one such example of unneeded red tape, which he said “will increase costs for both sellers and borrowers.”
Adam Cockey Jr., chair of the NAR Real Estate Services Forum, argued in testimony to the same House panel that the current reform proposal “tips the balance in favor of the largest financial industry players, opens the door to legal challenges, and does little if anything to benefit consumers.”
The NAR has called for the RESPA reform proposal to be withdrawn altogether.
MBA president and CEO Jonathan L. Kempner said that while the trade organization “applauded” HUD for its effort to re-define RESPA criteria, updating the Act needed to be part of a larger effort to simplify the overall origination process for consumers.
“Recent events demonstrate that borrowers also need additional clarity about the terms and cost of credit,which falls under the Fed’s responsibility under TILA,” said Kempner. “For that reason, we strongly believe that HUD should link its efforts with the Board of Governors of the Federal Reserve so that both agencies work together in a careful, coordinated and comprehensive manner to truly simplify and improve the mortgage process for consumers.”
Specifically, the MBA said it wants to see HUD and Fed officials produce a combined TILA and good-faith-estimate (GFE) form to replace current disclosures given to borrowers.
Related links:
read the MBA’s full letter to HUD
“The Board has already issued proposed new rules under TILA and the Home Ownership and Equity Protection Act (HOEPA) concerning the mortgage market generally and is expected tosoon embark on further reform efforts concerning TILA disclosures specifically,” wrote Kempner in a letter to HUD officials.
“HUD’s efforts should be linked to the Board’s efforts.”
While the MBA is pushing for a collaborative reform approach, HUD’s efforts to reform RESPA have come under much stronger fire from the National Association of Realtors and the American Land Title Association.
“We believe that RESPA reform cannot be resolved in one sweeping change without considering and appreciating the many moving parts of a residential real estate transaction,” ALTA president Gary Kermott said in testimony during a recent hearing at the House Committee on Small Business.
Among ALTA’s concerns are changes to RESPA procedures that it argues will result in more confusion, red tape and cost for people both buying and selling a home.
Kermott pointed to the imposition of responsibility on the closing agent to read and interpret the closing script on behalf of the borrowers as one such example of unneeded red tape, which he said “will increase costs for both sellers and borrowers.”
Adam Cockey Jr., chair of the NAR Real Estate Services Forum, argued in testimony to the same House panel that the current reform proposal “tips the balance in favor of the largest financial industry players, opens the door to legal challenges, and does little if anything to benefit consumers.”
The NAR has called for the RESPA reform proposal to be withdrawn altogether.
MBA Issues Formal Comments On HUD's RESPA Proposal
The Mortgage Bankers Association (MBA) has released its formal comments in response to the Department of Housing and Urban Development's (HUD) proposed rule to amend Regulation X, its Real Estate Settlement Procedures Act (RESPA) regulations. In the letter, MBA President and CEO Jonathan L. Kempner urged HUD to coordinate its RESPA reform efforts with the Federal Reserve's work to improve clarity about the terms and cost of credit under the Truth in Lending Act (TILA)."MBA applauds HUD's RESPA reform efforts and believes RESPA reform has the potential to greatly improve disclosures to consumers concerning their closing costs," says Kempner. "Recent events demonstrate that borrowers also need additional clarity about the terms and cost of credit, which falls under the Fed's responsibility under TILA. For that reason, we strongly believe that HUD should link its efforts with the Board of Governors of the Federal Reserve so that both agencies work together in a careful, coordinated and comprehensive manner to truly simplify and improve the mortgage process for consumers."Specifically, MBA's comments call on HUD and the Fed to work together to produce a combined TILA and Good Faith Estimate (GFE) form and implement it at the same time to replace the current RESPA and TILA disclosures that are provided to borrowers at the time of application. MBA and its members have developed a proposed combined form, as well as a comparable revised HUD-1, which MBA included with its comment letter.In its letter, MBA also states that it would support complementary statutory changes that would truly simplify and improve the mortgage process.
Source: Mortgage Bankers Association
Source: Mortgage Bankers Association
FHA Seeks To Ban Seller-Assisted Payments
In response to growing loan losses, officials from the Federal Housing Administration (FHA) are trying to eliminate seller-assisted down payments on federally insured mortgages, the Wall Street Journal reports.The FHA has reopened for public comment a proposed rule banning such payments, which the agency believes can increase foreclosure rates. Seller-funded down payments involve a third party, usually a charity, that provides a down payment on a home and is then reimbursed by the seller or home builder.Brian Montgomery, commissioner of the FHA, recently noted that government-backed loans made to borrowers who receive down-payment assistance enter foreclosure at three times the rate of other loans.
Source: Wall Street Journal
Source: Wall Street Journal
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