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S. 2338, The FHA Modernization Act of 2007 (113 comments ↓ | 5 wiki edits: view article ↓)
An original bill to modernize and update the National Housing Act and enable the Federal Housing Administration to more effectively reach underserved borrowers.
Detailed Summary
FHA Modernization Act of 2007 - <b>Title I: Building American Homeownership</b> - Building American Homeownership Act of 2007 - (Sec. 102) Amends the National Housing Act to: (1) modify requirements for the maximum principal loan obligation, changing one element in the formula from 95% to 100% of the median one-family house price in the area; and (2) limit the principal loan obligation to 100% of the appraised value of the property.
(Sec. 103) Amends the National Housing Act to revise eligibility criteria for cash down payment for Federal Housing Administration (FHA) mortgage insurance. Reduces such payment from the current 3% to 1.5% of the appraised value of the property.
Repeals the authority of corporations or other persons to pay the down payment for: (1) individuals at age 60 or older at the time the mortgage was endorsed for insurance or if the mortgage met the requirement for single-family housing in outlying areas; or (2) covering a single-family home being purchased under the low-income housing demonstration project or a housing unit in connection with a homeownership program under the Homeownership and Opportunity Through HOPE Act.
Requires the Secretary of Housing and Urban Development (HUD), with respect to cash down payments, to consider as cash or its equivalent any amounts borrowed from (currently, gifted by) a family member, provided such funds are paid back (as under current law). Provides that the principal obligation of the mortgage and the obligation secured by such lien may not exceed 100% of the appraised value of the property (as under current law). Repeals the inclusion of any initial service charges, appraisal, inspection and other fees in connection with the mortgage.
Prohibits cash down payments from consisting, in whole or in part, of funds provided before, during, or after closing of the property sale by: (1) the seller or any other person or entity that financially benefits from the transaction; or (2) any third party or entity that is reimbursed, directly or indirectly, by such parties.
(Sec. 104) Releases from HUD upfront mortgage insurance premium requirements: (1) certain mortgages secured by one- to four-family dwellings that are obligations of the General Insurance Fund (GIF); (2) insured rehabilitation loans for one- to four-family structures; and (3) condominium mortgages.
Increases from: (1) 2.25% to 3% the maximum upfront mortgage insurance premium HUD may collect on mortgages secured by a one- to four-family dwelling that is an obligation of the Mutual Mortgage Insurance (MMI) Fund; and (2) 2% to 2.75% such premium if, as under current law, the mortgagor is a first-time homebuyer who completes a HUD approved program of counseling with respect to the responsibilities and financial management involved in homeownership.
(Sec. 105) Replaces the GIF with the MMI Fund with respect to funds received and disbursements made in connection with rehabilitation loans for one- to four-family structures.<br>
(Sec. 107) Permits the Secretary to insure any mortgage covering a one-family unit in a condominium if, in addition to other specified requirements, the project of which it is part has a certain HUD-insured blanket mortgage.
Includes among insurable one-family units (condominiums) in multifamily projects those in which the dwelling units are manufactured housing units, semidetached or detached.
(Sec. 108) Revises requirements for the MMI Fund, specifying operating goals among other things. Requires an annual independent actuarial study of the Fund, on the basis of which the Secretary may make either: (1) programmatic adjustments to reduce any risk to the Fund; or (2) appropriate premium adjustments.
Makes insured mortgages used in conjunction with the Homeownership Voucher program, as well as reverse mortgages, obligations of the MMI Fund.
(Sec. 109) Makes insurance of a Native Hawaiian or Indian reservation mortgage the obligation of the MMI Fund (instead of the GIF).
(Sec. 111) Redefines "home mortgage" and "mortgage" to include subordinate mortgage, with respect to FHA insurance of cooperative housing projects.
(Sec. 112) Eliminates the limitation on the aggregate number of home equity conversion mortgages (HECMs, or reverse mortgages) for elderly homeowners insured under the National Housing Act.
Authorizes the Secretary to insure an HECM to: (1) enable an elderly mortgagor to purchase a one- to four-family dwelling unit, one unit of which the mortgagor will occupy as a primary residence; and (2) provide for any future payments to the mortgagor, based on available equity.
Establishes a single national loan limit for HECMs equivalent to the limit for a one-family residence under the Federal Home Loan Mortgage Corporation Act.
Directs: (1) the Secretary to establish specified limits on the origination fee that may be charged to an HECM mortgagor; and (2) the Comptroller General to study and report to Congress on the costs and availability of credit under the HECMs for elderly homeowners program.
(Sec. 113) Amends the Energy Policy Act of 1992 to raise the cap on the price of the cost-effective energy efficiency improvements under the energy efficiency mortgages program.
(Sec. 114) Amends the National Housing Act to require the Secretary to carry out a pilot program to establish, and make available to mortgagees, an automated process for providing alternative credit rating information for mortgagors and prospective mortgagors (under mortgages on one- to four-family residences) without sufficient credit history, for determining their creditworthiness. Allows such alternative credit rating information to include among other information, rent, utilities, and insurance payment histories. Requires the Comptroller General to identify to Congress: (1) the number of additional mortgagors served using the automatic process; and (2) the impact of such process and the insurance of mortgages pursuant to it on the safety and soundness of FHA mortgage insurance funds of which such mortgages are obligations.
(Sec. 115) Requires the Secretary and the FHA Commissioner to develop, implement, and report to specified congressional committees a plan to improve the FHA loss mitigation process.
(Sec. 116) Authorizes appropriations to the Secretary for FY2008-FY2012 from the negative credit subsidy for FHA mortgage insurance programs to increase funding for: (1) technology; (2) processes; (3) program performance; (4) fraud elimination; and (5) appropriate staffing in connection with such programs.
Conditions such authorization for any fiscal year upon certification by the Secretary that mortgage insurance premiums charged during it: (1) are established at the minimum amount sufficient to comply with the requirements for the MMI capital ratio; and (2) ensure the safety and soundness of the other FHA mortgage insurance funds. Requires any such negative credit subsidy to ensure adequately the efficient delivery and availability of FHA mortgage insurance programs.
Requires the Secretary to study and report to Congress on how best to update and upgrade FHA mortgage insurance program processes and technologies so that: (1) the procedures for originating, insuring, and servicing of mortgages conform with those customarily used by secondary market purchasers of residential mortgage loans; and (2) such processes and technology provide appropriate staffing for such programs.
(Sec. 117) Amends the Housing and Urban Development Act of 1968 to revise post-purchase housing counseling eligibility requirements for homeowners who are, or are expected to be, unable to make payments, correct a home loan delinquency within a reasonable time, or resume full home loan payments due to a reduction in the homeowner's income.
Extends eligibility to such a homeowner that has a significant: (1) reduction in household income due to divorce or death; or (2) increase in his or her basic expenses or those of an immediate family member (including the spouse, child, or parent for whom the homeowner provides substantial care or financial assistance) due to an unexpected or significant increase in medical expenses, a divorce, unexpected and significant damage to the property, the repair of which will not be covered by private or public insurance, or a large property-tax increase.
Adds as an alternative criterion that the annual income of the homeowner is no longer greater than the annual low- or moderate-income.
Repeals the automatic counseling eligibility of first-time home buyers whose mortgage: (1) principal obligation exceeds 97% of the property's appraised value; and (2) will be insured.
(Sec. 118) Requires the Secretary to establish a demonstration program to test the effectiveness of alternative forms of pre-purchase homeownership counseling for up to 3,000 first-time homebuyers approved for a home loan with a loan-to-value (LTV) ratio between 97% and 98.5% (eligible homebuyers).
Specifies such alternative forms as: (1) telephone counseling; (2) individual in-person counseling; (3) web-based counseling; (4) counseling classes; or (5) any other appropriate form or type of counseling.
Authorizes the Secretary to provide incentives to eligible homebuyers to participate in the demonstration program, including reduction of any FHA insurance premium charges owed.
(Sec. 119) Amends the federal criminal code to subject an individual to a fine of up to $1 million and imprisonment for up to 30 years, or both, for certain fraudulent actions intended to influence FHA action in any way, including with respect to an insurance agreement or application for insurance or a guarantee.
(Sec. 120) Prohibits the Secretary, through FY2009, from increasing premiums for the FHA multifamily insurance program above the FY2006 premiums, unless without such increase, insurance of additional mortgages under the program would require the appropriation of new budget authority to cover the costs of such insurance.
Requires the Secretary, at least 30 days before such an increase takes effect, to: (1) notify specified congressional committees of the increase; and (2) publish notice of it in the Federal Register.
Authorizes the Secretary to waive the 30-day notice requirement if waiting 30 days before increasing premiums would cause substantial damage to the solvency of multifamily housing programs.
(Sec. 123) Prohibits the Secretary, for one year following enactment of this Act, from enacting, executing, or taking actions to make effective the planned implementation of risk-based premiums, designed for mortgage lenders to offer borrowers an FHA-insured product that provides a range of mortgage insurance premium pricing, based on the risk the insurance contract represents.
<b>Title II: Manufactured Housing Loan Modernization</b> - FHA Manufactured Housing Loan Modernization Act of 2007 - (Sec. 203) Amends the National Housing Act with respect to FHA housing loan insurance for manufactured homes (or lots for such homes).
Exempts such loans from certain financial institution portfolio limits, increasing an allowable claim for loss from 10% to 90% of an institution's total amount of such loans, credit advances, and purchases.
(Sec. 204) Makes any new contract of insurance for such loans, credit advances, or purchases conclusive evidence of an institution's insurance eligibility. (Thus requires each loan to be insured individually instead of as part of a bundle of such loans.)
(Sec. 205) Increases loan limits, requiring annual indexing.
(Sec. 206) Prescribes requirements for payment by a borrower of premium charges for credit insurance, including an upfront premium of up to 2.25% and an annual premium of up to 1%.
(Sec. 207) Revises requirements for the handling and disposal of any real or personal property conveyed to or acquired by the Secretary, and the pursuit of all claims against mortgagors assigned to the Secretary by mortgagees.
(Sec. 208) Directs the Secretary to: (1) establish underwriting criteria for loans and credit in connection with a manufactured home, or a lot for one, that will ensure the manufactured housing program's financial soundness; and (2) revise within six months existing criteria to accord with those established under this Act.
(Sec. 209) Amends the National Housing Act to apply the prohibition against kickbacks and unearned fees in the Real Estate Settlement Procedures Act of 1974 (RESPA) to each sale of a manufactured homes financed with an FHA-insured loan or extension of credit and related services.
Authorizes the Secretary to: (1) determine the manner and extent to which such RESPA prohibition against kickbacks and unearned fees may reasonably be applied to such sale; and (2) grant necessary exemptions to achieve such purpose.
Requires the Secretary, in connection with the purchase of a manufactured home financed with a FHA loan or extension of credit, to prohibit acts or practices in connection with loans or extensions of credit that the Secretary finds to be unfair, deceptive, or otherwise not in the interests of the borrower.
(Sec. 210) Prescribes certain lease requirements as prerequisites for HUD insurance of a financial institution with respect to a mortgage loan to finance a manufactured home intended to be leased in a manufactured home community.
Status of the Legislation
Latest Major Action: 12/17/2007: Held at the desk.
Points in Favor
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Learn More
See Related Bills:
- The Expanding American Homeownership Act of 2007 (H.R. 1752)
- The Expanding American Homeownership Act of 2007 (H.R. 1852)
- The Expanding American Homeownership Act of 2007 (S. 2325)
- The SAFE Act (S. 2734) (more recent activity!)
See Bills on the Same Subject:
Aged, Budgets, Condominium (Housing), Congress, Congressional investigations, Consumer credit, Consumers, Cooperative housing, Counseling, Department of Housing and Urban Development, Energy, Energy efficiency, Executive departments, Federal aid to housing, Fees, Finance, Foreclosure, Fraud, Government trust funds, Hawaii, Home equity conversion, Home ownership, Homestead law, Housing, Housing for the aged, Indian housing, Insurance premiums, Minorities, Mobile homes, Mortgage guaranty insurance, Mortgages, Performance measurement, Residential rehabilitation, Secondary mortgage market, Single family housing, Social services (more subjects ↓)
See Bills in the Same Budget Category:
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Visitor Comments
John
FHA reform is way overdue. Senator Coburn should read the bill before coming back from the two week recess and limit the debate.
Robert Hurd
FHA Modernization Act of 2007 is very important to this country and must be passed by the Senate. FHA is more important now to this country's financial stability and to home owners needing help, than it has been in the past 70 years. The Senate should have passed this legistation soon after the House passed HR 1852. We need the President to urge the Senate to get with the program and not delay in passing this bill so the President can sign it into law. Our economy depends on it!!
Don Marginson
I am a Mortgage Broker, 30 years in the business. I have never been a sub-prime lender. My office has stacks of loan files that we have no loan programs or lenders available for.
These loans are not real estate speculators or flippers, but they are the average American home-owners wanting to keep their American dream!
Approximately 500,000 home loans will re-set in the 1st quarter of next year. If these homeowners must default that would be approximately 750,000 American children that will no longer be able to go to their same schools, play with their neighborhood friends or attend their same Church or Synagogue.
These families will be financially ruined. You cannot even rent a home without a good credit history.
This is not about Mortgage Broker’s staying in business or how much money they make. This is about the American Homeowner.
Phil
The Senate let a similar bill die last year due to neglect. They seem to be doing the same this year. I think what we need is new senators one and all. Dem or rep doesn't seem to make a difference, they all think they are crown princes instead of our representatives.
Gloria La Mantia
I have e-mailed Senator Tom Coburn to not hold up this bill. I have not heard from him. I also e-mailed President Bush,no news yet. However I did hear from Scott Meyer from NAHB.Plese e-mailSenator Tom Coburn for action.
Mary Ann
When, I ask, when will the Senate move on this. Time is running out.
Gloria La Mantia
The Senate voted on S2338 today,December 14, 2007 at 9am and the vote was yea 93 nay 1. We will see how long it takes to have The President sign it into law. Senator Tom Coburn had a lot of good points. This was on c-span channel 351. Thank God! for all the prayers.
Mary Ann
You just made my day. I will not stop praying until it is a done deal.
Josephine Ruvalcaba
I am overjoyed to see that the Senate voted to pass bill S2338. I e-mailed Senator Tom Coburn and I also Faxed his offices in Oklahoma and Washington D.C. urging the Senator not to stall, and to proceed to pass this important bill. I have not received a reply from his office as yet. I understand that Bill H.R. 1852 has recently passed and I'm thankful for that also.
Bryan Ehrlich
I emailed Coburn and my Florida State Senators. I asked Coburn to Legistlate rather than vegitate. I think all of our emails may have had some influence.
Evan Little
What we need to do is stop allowing the Federal Reserve Bank to print money out of thin air. Stop the private bankers who own the Federal Reserve from adjusting the flow of money to suit their own needs on the back of tax payers. This is why both parents must work to support a family now, why the dollar is falling and why you're supporting an increase in the FHA loan limit. But hey, ignorance is bliss right? WAKE UP!
Tory
This is ridiculous! I can't believe you are okay with bailing these people out of their situation. What ever happened to individual responsibility. It is the lenders fault for lending to people who they knew could not afford the house that they are getting. We need mortgage reform and elimination of these types of loans. Oh, so maybe they lose their house, boo hoo. Get a grip. The US is going into debt at a rate of 1.9 BILLION dollars per day because of stupid legislation like this.
Terry
Evan, you are right on point. I am a mortgage banker and not totally opposed to FHA reform, but agree that in the end, the tax payers will suffer more at the hands of the FED. This whole mess rests on their shoulders. We need some honest money first and foremost.
John
FHA is not a subprime bail out. It requires borrowers to verify income and assets. It has credit standards. The borrowers must qualify and their properties must appraise. If a subprime borrower is behind on the mortgage payments then the only program available is the FHA Secure program (already available). Still they must document income and assets. Many of these borrowers owe more then what FHA currently allows. The FHA Reform Bill will help on this one issue. All the hype on how FHA is coming to the rescue is just that. Relax.
Tom
Reform is way overdue. Because FHA was behind the times is the big reasaon the secondary market grew into the monster that finally reared its ugly head in August of 2007. Government is not always the answer to peoples problems, but in this case where it has been a keystone to the purchase of homes in our country change will be good. The changes may not be perfect but it will put FHA back in the market again.
Frank Farmand
I have been a Mortgage Broker since 1984. The Reform is way overdue. The penalty for Fraud (by companies, banks or loan officer’s) must be a lot tougher. We do need to add more Federal Regulations to control Loan Officer’s working for Banks or Mortgage Broker’s. Any one who touches a loan application must meet and follow certain Federal Rules and Regulations. For example, some States including Missouri, ex Con-Man with records, can be a loan officer and work for a Bank or a Mortgage Company. We do need to add it to the Bill and implement it nationally.
Trojan_Large
Did this bill get pass ?
Carol
It has passed the Senate, but not the House.
John
S2338 Passed in the Senate 93-1 but today 01-15-08 conference committee of House/Senate conferees must be picked to compromise on the House and Senate versions of the FHA REFORM. Lastly the President will sign hopefully before the State of the Union Address.
bennettjohn
here's another point of view. i'm a senior trying to get a reverse mortgage on a home i've owned for 24 years. it FHA appraised for $305,000 but my county FHA limit is $200,160. the new federal limit will be prox $414,000 and be national in scope. the current limit is archaic, obsolete, and out of touch with current market prices.
i agree, reform is long overdue.
if s2338 passed 93-1 on 01/15/08, why does the "latest major action" state 12/17/07 "held at desk"?
bennettjohn
man, oh man, is that code difficult to read, or what! it took me 3 tries before it accepted it and posted my comment. we've all seen other variations that are much more user friendly. i wonder how many folks have tried to post comments but been rejected by an indecipherable cryptograph.
John
Sorry if I confused you about S2338. It passed in Senate on December 14th. It has been held since then. For almost a month Congress has been in recess. They returned on 01/15/08 and now need to pick House/Senate conferees.
Cathy
How can I track what is happening with this bill in the House, since it's done in the Senate? I'm trying to watch it and estimate timing...for when it might go into effect.
John
Follow press releases of Barney Franks. He is chairman of Financial Services Committee.
Jason
Once signed into law, how long for lenders to implement the changes and actually start granting these higher loan amount loans? Days, weeks, or months? Any thoughts?
Trojan_Large
I am wondering have the house pass the this FHA bill or close to it ? I was hoping that this bill will get pass before the end of Jan. I am not seeing a clear date on Barney Franks site. Can someone update us on a good site to check this. Thanks
John
The FHA Reform bill is now part of the Presidents stimulus plan. It has to be approved in the House. Maybe a vote by end of January. Then to the Senate for a vote. Hopefully they act quickly and we get a vote. Finally to the President in mid February. It will be worth the wait if FHA loan limits go to $730,000 like they are saying in high cost area.
Charles
Reality: With all the first time home buyers programs being denied by bank underwritters,the minimum down payment realistically available today is 10%. If FHA does not come for a rescue as soon as possible, then the house prices are going to drop even much more drastically and number of sales will decrease to catastrophic levels. We need action, now!
Brian
My understanding is the bill passed without the inclusion of brokers being able to obtain a surety bond instead of a financial audit. Is this the case? I have not been able to find the answer yet.
Frank
I understand that the loan limits will be raised higher than $417,000.Will thia help someone who wanted to take out a reverse mortgage if you were short before.Our that won't change. Thanks
Trojan_Large
Will this be for the state of NC ?
Gerry
If Wall Street just taught us about "modernization" with the sub-prime debacle, why is everyone suggesting FHA should "modernize" too? The Wall Street model clearly failed and for some reason we want HUD to follow sub-prime off the cliff by adopting subprime's fatal flaws, e.g. no money down.
House prices rose based on cheap money coupled with "fog-a-mirror" underwriting. These inflated house prices are predicated on fantasy financing. The fairy tale has now turned dark.
bennettjohn
today, 1/31, the senate will pass a stimulus package over and above what the president worked out with the house. i agree with you, john, it'll go back to the house and be passed in a few days, with the president signing it promptly. also, john made a good call back in late december when he said it would be included in the state of the union address. that was before the term "stimulus package" was in the headlines.
Lorenza
In Jan.2008 I faxed letter to majority leader Hoyer and copied nancy Palosi,Diane Feinstein, Babara Boxer & Jerry Lewis (Speaker of the Hs, 2 Senators & 1 Representative respectively) urging passage of S2338 Expand'g American Homeownership Act of 2007 as since pasage by the Senate Dec. 2007 as Bill was sent to the house to correct descrepancies between their Bill H.R. 1852 and Senate Bill S2338. To date, 2/2008, Bill sits idle. Majority Leader has not assigned conferees nor placed on Agenda for study, modification, review and presentation to vote on it. Why does our government not finish what is started before going on to other issues/Bills?
John
02/05/2008 S2338 "still held at desk" Many House members thought that the stimulus package would include the FHA Reform bill as did I, but on the White House urging it was left off. Last week Pelosi made a comment that she thinks S2338 FHA Reform will be ready for Bush signing before the stimulus package because of the Senate adding more to the House version. Besides the stimulus package debate, FISA and the Farm bill, we will be luck if S2338 is ready for Bush to sign by 15th of February.
joseph
Many homeowners are anxiously awaiting the change in raising the limits for reverse mortgages detailed in SB S2338. This is a much needed program to help our seniors to use the equity in their homes. Pass the stimulus bill !!!!!!!
Naples
Will the new loan limits help on a reverse mortgage if you still have a balance.
Jim
The increase in county limit may indeed allow many seniors who had 'low' reverse mortgages the opportunity to refinance.
John
Unfortunately "Dr. No" Senator Coburn won out and had FHA reverse mortgages removed from the temporary increase in the loan limits of the stimulus plan. We need to refocus on S2338 FHA Modernization Bill. Call your congressional and senate representatives and let them know they need to complete the compromise and get it to Bush to sign.
Bob
To those who are concerned that their tax dollars are going to pay for some sort of government sponsored "bailout", you should be aware that FHA is NOT funded with taxpayer dollars. Per the FHA website at fha.gov: "FHA operates entirely from self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely.” To those who are concerned that raising the FHA loan limit is a risky idea, you should be aware that borrowers are required to prove their income (IE: document their income and prove that they can afford the mortgage) in order to qualify for an FHA-guaranteed loan. So, even at the higher loan limits, borrowers should not be at risk of getting into a home they cannot afford. This is not a tax payer bailout and it’s not too risky. It is good legislation. Pass the bill!
Trojan_Large
Hi, does any know how long it takes for the new loan limit to go in to affect ?
Dan
Tory should take a chill pill. Bob is accurate. This is not a bailout. FHA(203/703(b))pays for itself. Always has. FHA loans perform because income/assets are documented. Previous limitation was 48% of conforming. Way overdue for a change. T-L, FHA reg changes are implemented typically 30 days after publication of the new law - figure 3/13/08. FHA is in the process of providing updated median income data upon which the new loan limits will be based.
George
Because of the stimulus bill,is the fha modernization bill dead? It hasn't been reconciled yet. Is there any movement?
Dan
I have been doing FHAs since they raised the loan limit from $35K to $60K back in the mid '70s. FHA doesn't seem to do more than one thing at a time. On the other hand, when they make a change it is typically pretty significant. I've heard nothing further on the reconciliation but I don't think it is dead. Because the stimulus package addressed loan limits, which was a major focus, they might set this aside and address the MIP vs Credit Score, lowered down pay and more permanent loan limits later in the year. More immediatedly I am curious to see if there is enough congressional support for maintaining the Ameridream-type DAPs beyond this month.
Rex Davis
The key is get it PASSED and quit playing around with it so that those of us who can benefit from it have the chance before we DIE.
Naples
Why was the FHA reverse mortgage removed from the stimulus bill.are they still talking about it.or is it dead.Like some of us might be before it's passed !!
RUDY
I heard this bill has been passed.Does anyone know where the bili sits currently? Also how long before we see the changes in FHA
John
2/29/08 FHA Modernization bill not yet passed. Saw today that House & Senate resolving a few more differences such as maximum loan limit. Regarding the temporary loan limit, possibly March 7th.
Francella
When is this bill going to get passed, go to joint committee and signed by Bush? We wait and wait and wait, and in the meantime foreclosures just keep mounting up and up and up.
I'm sick of the foot-dragging on Capitol Hill. People need this. If just one House or Senate member was in the position of any number of my clients - this Bill would be OVER...a done deal!!! Is there a Foreclosure Lobby? Because that group is making money hand over hand on the backs of honest homeowners. Congress needs to get the lead out!!!
Frank
Just the older people that this bill will help by just raising the loan limits should be enough to make them move swiftly on this.Is there any site that you can follow this bill.The NRMLA wiil only tell you if your a member.
Ryan
John,
How are you able to track? I have a loan pending on this legislation, so I'm very anxious!
John
Ryan, Be patient it may still be a few weeks before it gets to the President. Try GovTrack.us, financialservices.house.gov or CQ Today.
Gloria
Bill is currently in conference committee.Comprimise bill,then back to each chamber of Congress then sent to the President for sigature, then a formal rulemaking process needs to take place before the bill could go into effect. My Aunt will be living on the State by that time, whenever that is.
Patrick O'Neil
The 1996 reform of The Fair Credit Report Act (FCRA) allowed lenders to make "conditional offers of credit" to consumers. This gave sub-prime lenders the ability to access the credit bureaus for lower credit-scored prospects and then they started making the refinance offers without having to extend a "firm offer of credit" to the consumer. The revision of the FCRA regulations and FHA's inability to come up with loan products to stay competitive created the sub-prime market and the mess we're in today.
Robert
We need AARP to flex its lobbying muscles in Washington and get these 2 bills reconciled and out of conference committee, acclaimed by both houses and on the President' desk. Email AARP and the National Reverse Mortgage Lenders Assocation to volunteer and request information on how to support this measure, etc
Mortgages in Reverse
It is unbelievable how the "foot-dragging" and procrastination in Congress drags out these bills for such a long period of time. Seniors "near" foreclosure are holding their collective breaths waiting for this legislation to get to the White House to be signed into law. Maybe they are waiting for the "new" president to receive the accolades from its passage -- and not our current CiC.
Gary
Finally, someone has the sense to
amendthe FHA regs to include us
Seniors in manufactured housing who live in a "condominimum" setup
We own the land, are on the tax rolls, but because we also own a
part of the whole community, we
are denied a reverse mortgage.
Unfair, and overdue to be overhauled! Get it passed.
Nancy
Having read John's comments to Ryan about being patient, I went to the 3 sites he recommended (GovTrack.us, financialservices.house.gov or CQ Today)and could not seem to find anything with a recent date. When did Gloria post her comment that the bill is in the Conference Committee?
John
03/13/2008 For the last four days I have read that the conferees in the House and Senate have been meeting and are very close to an agreement. The last issue is on the loan limits. On the GovTrack.us web site it does not show that it has been looked at "still at the desk". Barney Franks quoted as saying they are very close to an agreement. Chris Dodd says that they have to dot their I's and cross their t's. He says that before this Friday we will hear something but final agreement will not be until early April. (Another recess for Congress)
Patricia B.
Again I am amazed at those who are lucky enough not to have to use this type of refinancing. It has saved my life and my home. This has nothing to do as implied by some with "irresponsibility." If there was more room to write, I would fill up pages regarding insurance company's fraudulent behavior and irresponsibility which I have personally experienced due to no fault of my own. A thankful widow!
bennettjohn
john-
keep coming with the updates. you seem to have a firm grasp on how the govt operates. most of us out here are mystified. many of us are seniors who merely want a reverse mortgage based on our true equity in our home.
thanks for your continued explanations and updates.
webmaster
Agreed. Thank you for your service to the WashingtonWatch.com community, John. You might consider editing the wiki article for the bill so that a thorough, organized discussion of the bill and its status is always available.
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Anti-mortgage brokers
Isn't it humorous that mortgage brokers want FHA to increase loan-to-value so they can continue to hyperinflate properties values and pocket excessive fees.
John
There is nothing humorous about people losing their homes because they had no options available because FHA loan limits and policies were behind the times. Subprime and Alt-A programs skyrocketed while FHA dried up. The ignorant comments about mortgage brokers has no place here.
bennettjohn
i concur. in fact s2338 actually reduces commissions from 2% of a home's appraised value to only 1 and 1/2%. how does a reduction of brokers' commissions equate to "excessive fees?"
i have a choice to either sellout or to borrow operating expenses until s2338 becomes law. i have chosen to borrow the necessary funds on a month by month basis. my neighbor just sold out for $370,000 because the county FHA cap is $200,160. Yes, the FHA caps are obsolete and in need of updating.
John
04/02/2008 Senate housing relief bill may now include the FHA Modernization Bill. Details still coming in. Hopefully Senators do not add to many amendments.
beth
thanks for the update, John. I'm keeping my fingers crossed!
Robert
John,
On 3/13/08 you indicated that final agreement was close in the Conference Committee. Attaching the bill to preliminary Senate housing relief bill is a major step backwards, isn't it? Were we not a few days from a final agreement going to both houses and then onto the President signature (Bush has stated he would sign the bill)?
Relinquishing the final agreement is a giant step backwards into uncertainity and months of possible delay. Why is the Congress ready to cancel the conference committee's progress on the final agreement?
ROBERT
I CONCUR , "THANKS AGAIN" John
for the update ....
John
This new bill will be fast tracked through both Senate and House. The last issues delaying the FHA program have been resolved. $550,000 loan limit and 3.5% down payments.My guess is that President will sign by April 15th....
Jamie
John,
Please keep the updates coming. I have many clients doing everthing they can to hold on so they don't lose their homes to foreclosure. s2338 is they only chance they have of remaining in the home. I talk to many of them weekly and it's frustrating when I have to tell them the status hasn't changed. Thanks again for all the good info and for this posting site.
Lisa
The current FHA down payment (borrower contribution) is 3%. Are you under the impression that they are going to increase it to 3.5%? I thought it was supposed to go in the opposite direction?! By the way, thanks for staying on top of this and providing updates, John.
Robert
Dear John,
I have been following the Senate version of the new housing reflief bill. As far as I can see, there is absolutely no mention of HECM (FHA reverse mortgage) borrowers. Remember, the Economic Stimulus Package specially excluded HECM (FHA)borrowers. If this new bill supercedes S.2338 and its companion bill in the House and the "near final agreement" of the Conference Committe is scrapped--THEN MILLIONS OF SENIORS WILL DISENFRANCHISED FROM FHA MODERNIZATION BENEFITS AND RELIEF FROM OUTDATED REGULATIONS. John,please reassure me that this is not going to happen.
John
The website: www.senate.gov Next find HR3221 Next S.Amdt.4387 then text of amendment. It will reassure you that it will happen this time. FHA HECM's are a big part of the Modernization Bill. Curious to find out if $417,000 will be the sigle national HECM limit or will it be $550,000 in high cost areas like SoCal
Jim
Dear John and Robert:
I have read both of your posts and can not determine who is on the mark. This is the most confusing and convaluted piece of legislation that I have ever seen. Calls to my local congressmen confirm this! They don't know what's going on (they don't tell you this)but I get this feeling because they can not answer whether or not the HECM increase of the county limit is actually in the legislation
BILL
Would someone "PLEASE" advise if the housing relief bill that just
passed the senate includes the FHA
HECM Moderization Bill ...
THANK YOU EVER SO MUCH FOR YOUR HELP !!!
John Coe
Bill,
Yes it does. I don't know the specifics, but my info tells me a flat 550k lending limit. 2% origination up to 200k with a 1% orig after that, to a max cap of $6,000 total origination. Still digging through the mess to figure our when this will actually fly.
BILL
JOHN:
I Thank You for this information ..
You have been a wonderful "GOD SEND" with your updates & comments
PLEASE keep them coming ..
THANKS AGAIN !!!!
Robert
4/12/08HR3221 passed the Senate yesterdasy..incl. Dodd admendment for FHA modernization and HECM reform. Now, correct me if I'm wrong, the bill goes to conference committee as the House already passed this bill. The White House has stated 1)it will never get out of conference committee 2) they are unhappy with it 3)but have never specifically said Bush will veto. WHY CAN'T BOTH SIDES OF THE AISLE IN THE CONF. COMMITTEE AND THE WHITE WORK THIS OUT NOW! Dear John Coe, can this happen?
Jo Ann
Along with countless others, I am not so patiently awaiting for this bill to become law!
In fact, I am in limbo with a RM in thge works, but do not want to proceed until the loan limits are raised and, of course, the other aspects of the bill are a plus.
Writing to my Senators/Congressmen - anyone I can. Hopefully in this election year, we will see results.
John
04/14/2008 The FHA Modernization Bill is now part of the Foreclosure Prevention Act which was passed in the Senate on April 10th. The House and the President oppose key parts of the Senate measure (not the FHA Modernization portion). They feel that builders are getting to much help and people facing foreclosure are not getting enough. They plan on correcting that imbalance. House Financial Services Chairman Barney Frank says that by April 23-24th his panel will consider the plan. The FHA portion of this bill is about the only thing that all sides agree on. The last two issues, loan limit and down payment have been resolved. I now believe that the FHA Modernization Bill should never have been made a part of this foreclosure bill. It will pass in the next few weeks. There is lots of pressure on all sides to delay it much longer.
Robert
04/14/08 Dear John, Allright we have FHA Modernization "stuck" in HR3221. Why can't go back to HR1852 and S.2338, pull the "final agreement" out of conference committee and give it to Bush to sign. Once the President signs, S.Amd. 4387 can be dropped from the contentious HR3221 which could easily self-destruct anyway.
John
Robert, Today President Bush asked that Congress send him the FHA & GSE Reform Bills (three times) in his speech. It's unlikely that FHA Modernization would be stripped from the Foreclosure Prevention Bill now. But it sure would be nice.
Jim
Fyi…..
NRMLA Washington Update: March 2008
March 11, 2008
FHA Modernization Legislation Moving
NRMLA has learned that lawmakers have negotiated a final version of the FHA Modernization bill (HR 1852, S 2338) that retains many important reverse mortgage reforms.
Once a bill is formally adopted by the Conference Committee, it will be sent to both chambers of Congress for approval before its sent to the President for his signature.
Robert
04/17/08 Jim, it would nice to be able to turn the clock back. But as John and I understand it, the FHA Modernization is stuck in HR3221. All this occurred after March 11th. Read exchanges previous to yours.
BILL
JOHN:
I dont know if I have ever been on a roller coaster ride (with out the
thrills ) like this FHA modrnization bill .. would you please advise . what do you know think of HR 3221 now passing into law !!! ???
THANK YOU ....
Jim
I have passed on information recevied from the National Reverse Mortgage Lenders Association. I have to assume that they know what is going on.
Check their website. thanks
John
Jim: The info from NRMLA is old news. I get periodic updates from them myself. Sometimes they are wrong. I cross check their info with many other sources. Next week April 23-24th Barney Franks House Finance Chairman will hold hearings on S3221. It will get passed soon.
John
Correction: Barney Frank hearing on HR3221 Foreclosure Prevention Act of 2008 not S3221, which includes S2338 FHA Modernization Act 2008.
Jo Ann
I realize no one has a crystal ball, but does anyone know that if HR3221 is passed - signed into law - how long does it take for HUD to implement the provisions pertaining to HECMs?
I am on the brink of having to decide whether or not to close on a HECM 100 OR wait for higher limits (a higher loan amount) plus perhaps other beneficial changes.
A real dilemma! Would it be worth it for me to give up a 1.0 margin and have to settle for a 1.5 in order to obtain more money?
ANY help from the experts most welcome!
John
Jo Ann: The way Congress is going and the fact that HUD has to do it's thing afterwards I'd say you are five to seven weeks away to be able to fund a Hecm at the new loan limits. Also the HECM 100 is already a thing of the past. Verify if it is still available. CW and FF no longer offer the 1.00 margin. The one benefit of closing now is that home values are coming down.
Jo Ann
Thanks, John.
I appreciate your response.
I'll hvae to decide quickly!
Robert
04/21/08 Dear Jo Ann, only B of A still offers the HECM 100. After 4/24 they will no longer accept that product. Fund it as a HECM150 asap--a bird in the hand is better than one in the bush!
Johnny Blazzze
Hi, I am running out of hope that the FHA Modernization bill will ever get passed. Please let me know if this bill really is moving. Thanks
Jim
Hi Johnny you are truly a voice in the wilderness.
I am thru trying to figure this on out..I give up!!!
BILL
424
JOHN: Do you know if Barney Franks
has held hearings this week on
S3221
THANK YOU !
John
Bill, Franks held hearings on a mark up bill HR5830 on foreclosure assistance. I believe he might want to see if he can get more support to attach it to HR3221 Foreclosure Prevention Act which includes S2338 FHA Modernization. Have not found any mention of conference committee on this bill. I wrote both Nancy Pelosi and Barney Frank's office to not mess up things by adding to it. Everybody needs to write them.
BILL
JOHN:
Thank You for the reply, I will
write to both as you have indicated..
PLEASE keep the updates coming ..
Jo Ann
Am I correct that HR5830 passed the House? Next? and is the part re: RM loan limits still in there? Anyone know? So many questions!
chidembo
Yah! Everyone is mum about Reverse mortgage legislation nowadays. Where is rh3221? Does anyone know up to date news about the FHA Mod. Act which includes Reverse Mortgage? Thanks.
Jim
I believe that the bill which passed the Senate yesterday contains most of the provisions of the original S2338. Go to http://www.govtrack.us/congress/billtext.xpd?bill=h110-3221 and see sec122. I do not see increase in county limit
John
05/08/2008 FHA Modernization is not finalized. In the House debate this week in HR3221 Foreclosure Prevention Act, Barney Frank is proposing that the temporary limits be made permanent and that the single national limit for Hecm reverse mortgages be $550,000.
Easier to read
Just click on the "read the bill" link above to see the actual copy of the bill from Congress.
John
HR3221 passed in the House today with Barney Frank and Maxine Waters foreclosure bills. Now some behind the scenes negotiations with the Senate and White House over these additions before it goes back to the Senate for a vote. Hopefully they compromise and we put this FHA reform bill to rest.
BILL
5 8 8
John Thank You once again for your
concise update ,(as always ) ..
please continue with any further
news ..
BrianF
What if the President vetoes the Bill?
Betty
The Government certainly does not understand. Our families will be financially ruined. The Government needs to act on this bill.
John
05/13/2008 Today I read that on Thursday Chris Dodd in the Senate will bring up the FHA foreclosure and GSE reform bills for mark up. This time around Republican minority leader of the banking committee Senator Shelby is "the road blocker". Without White House intervention this guy could stall the FHA Modernization. Please call his office and let him know how you feel about this issue.
Robert
5/14/08 Can someone explain this to me? Bush wants FHA Modernization and has asked for the bill in public speeches numerous times. Barney Frank and Christopher Dodd want FHA Modernization. Most Republicans seem to want it viz. HR 1852 (last year). THEN WHY DON'T WE HAVE A LAW? Barney Frank takes his Foreclosure Prevention measure and attaches to it FHA Modernization and GSE Reform and, in effect, dares Bush to veto it. Rome is burning and Congress is fiddling and pointing fingers. System gridlock is killing FHA Modernization. It makes one dream of a more efficient SYSTEM!
bennettjohn
it was interesting to see you use the rome burning, nero fiddling metaphor, robert. i used the same one in my email today to sen. shelby as john, our fearless leader, requested. i hope hundreds of folks joined me in letting him know thousands of seniors are waiting for a national FHA limit.
Jo Ann
I wrote to Senator Shelby regarding how important this legislation is to everyone and to me - a senior waiting for FHA raised loan limits.
Reminded him of elections and the grey vote.
BrianF
I'd still like to hear your thoughts out there. If Bush vetoes, as he's threatened, what are the next steps?
Robert
Is FHA Modernization in the Dodd-Shelby compromise or not? 5/17/08