House Passes FHA Fiscal Solvency Act

The House passed the Federal HousingrnAdministration Fiscal Solvency Act Tuesday by a vote of 407 to 7.  The act, as introduced by Representative JudyrnBiggart (R-IL) authorizes the Department of Housing and Urban Development (HUD)rnto establish and collect additional annual premium payments for the first 11rnyears of the term of an insured mortgage in an amount between 0.55 percent andrn2 percent of the remaining insured principal balance for certain periods.  It also increases for 1.55 percent to 2.05rnpercent the 30-year annual premium for an insured mortgage whose originalrnprincipal obligation exceeds 95 percent of the remaining principal balance.</p

Itrnalso authorizes the Secretary tornterminate the approval of the mortgagee to originate or underwrite singlernfamily mortgages for more than one area or on a nationwide basis, if thernmortgagee has an excessive rate of early defaults and claims. </p

Acting FHA Commissioner Carol Galante</bsaid "We are pleased that the bill passedrnby the House includes provisions that will allow FHA to continue its efforts tornstrengthen its enforcement capabilities in order to protect its insurance fundrnand American taxpayers. We look forward to continuing to work with bothrnchambers to enact final legislation to provide FHA with the tools it needs tornbuild on the vital reforms implemented by this Administration.</p