House Passes Emergency Fiscal Solvency Act to Protect FHA Insurance Fund

A bill voted “yes” by the House of Representatives this week, if passed into law, would protect the position of the Federal Housing Administration’s mutual mortgage insurance (MMI) fund by implementing new rules regarding the fund. 

The fund’s status has raised questions in recent months after it received a billion-dollar windfall following a settlement with the largest mortgage companies in response to discrimination charges in a “robo-signing” scandal.

“This bill is intended to provide the FHA with the tools it needs to protect the Mutual Mortgage Insurance Fund (MMIF) from becoming insolvent,” the bill states. 

Advertisement

Under the Fiscal Solvency Act of 2012, minimum annual premiums for mortgage insurance will be set, and lenders that have committed fraud will be required to reimburse the FHA for mortgage-insurance losses. The bill passed by a full House vote of 402-7 in favor. 

FHA says it supports the bill becoming law. 

“We are pleased that the bill passed by the House includes provisions that will allow FHA to continue its efforts to strengthen its enforcement capabilities in order to protect its insurance fund and American taxpayers,” said FHA Acting Commissioner Carol Galante. “We look forward to continuing to work with both chambers to enact final legislation to provide FHA with the tools it needs to build on the vital reforms implemented by this Administration.”

The bill was introduced by Rep. Judy Biggert (R-Ill.) in March and was later referred to the House Committee on Financial Services. It will next to go the Senate. 

View the bill

Written by Elizabeth Ecker

Join the Conversation (1)

see all

This is a professional community. Please use discretion when posting a comment.

  • With all of the concern about Republicans wanting to downsize HUD, here is proof of their concern about maintaining the programs in the MMI Fund.

    While Ms. Galante may try to make this a part of the Obama housing program, this is clear evidence that the scare of the left about what the Republicans want to do with HUD is nothing more than political rhetoric.  If the Republicans did not want this or similar measures to shore up HUD, the House would have NEVER passed this bill or at least would not have done so before the election.

    What lies at the door of the White House are two things.  First, they proposed no such plan in the Senate or in the House even when they controlled both the House and the Senate.  Second, back in early 2009 when the White House OMB tore into the MMI Fund programs in their 2010 fiscal budget, the Obama Administration failed to go to the Congress they controlled and raise the necessary funding to properly capitalize these programs.

    The left complains that the Tea Party controls the House.  Well, if this is how the Tea Party would run the country through their candidate, Romney, perhaps there is some hope left in the idea of changing Administrations.

string(117) "https://reversemortgagedaily.com/2012/09/11/house-passes-emergency-fiscal-solvency-act-to-protect-fha-insurance-fund/"

Share your opinion