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.
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.
Written by Elizabeth Ecker