Best Friends Forever: FHA and Congress

It’s a difficult task these days to determine whether the relationship between congress and HUD’s FHA is positive or negative. It’s equally difficult to figure out whether that relationship is just a wily beast whose quicksilver nature is a neutral canvas upon which an endless cacophony of opposing interests attempt to howl their way to victory. The following items attest to this seeming lack of clarity.

National Mortgage News reported recently that the House Financial Services Committee will roll out a bill to scale back the Federal Housing Administrations’s single-family program.  This is projected to happen “in the next month or so,” according to Rep. Randy Neugebauer, (R-TX).  He posits that FHA has moved beyond its original charter and that it should be focused on financing “first-time and moderate-income homebuyers.” Neugebauer’s opinion on Fannie and Freddie consists of a need to dial their presence back in order to make room for private capital to return to the mortgage market.

In March, the National Low Income Housing Coalition reported that a then-current House bill was intended to strengthen the FHA and to ensure its long-term solvency.  Ranking member Maxine Waters (D-CA) said, “We plan on drafting additional legislation to give FHA more tools to bolster its insurance fund,” and “It is time to move beyond discussion of this issue and take action.”

Reverse Mortgage Daily reported a few weeks ago that the House was likely to pass an FHA reform bill, positioning 2013 as the year for change.  However, challenges to any type of progress run rampant, with a Bloomberg News report quoting Congressman Scott Garrett (R-NJ) as saying, “We should be able to get GSE reform and FHA reform done in this calendar year. We’ll get it done in the House and send it over to the Senate, where normally all good bills go to die.”

So the real question in regards to FHA lies not only in the type of plan that would receive bipartisan support, but in whether that support is even possible in this current economic climate.  With the recent and intense changes in the mortgage industry, the current climate indicates that now more than ever before, the industry needs to remain adaptable to change and active in voicing informed opinions in the direction of the legislative branch of government.

What changes do you see coming within the reverse and greater mortgage industries? Are there any areas of conflict or confusion that you give you serious pause about the industry?  Leave us a comment below and we’ll join you in directing attention to where we collectively think that it is more sorely needed.

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