MBA's Kieran Quinn Addresses Foreclosure Prevention Act
Friday, July 11, 2008
by Michael Peron
Tweet
Kieran P. Quinn, chairman of the Mortgage Bankers Association (MBA), released a statement today concerning the Senate's intention to pass HR 3221, the Foreclosure Prevention Act of 2008, which, among other things, would help modernize the Federal Housing Administration and guarantee government-sponsored enterprise reform.
“Recognizing that crucial reforms are needed to stabilize and set the course for a recovery of the housing market, Chairman Dodd and Ranking Member Shelby have set partisanship aside and created consensus within their parties,” Quinn said. “I want to thank them, as well as the Senate leaders, for their hard work in getting this bill passed. This bill, if it becomes law, has the potential to be the most important piece of housing legislation in more than a decade.”
The bill outlines many overarching changes that would influence the current practices of the FHA, such as an appropriation to improve technology, processes, program performance, eliminate fraud and provide appropriate staffing, according to Quinn's statement. The bill would also increase FHA loan limits to 110 percent of the local median home price, not to exceed $625,000, and place the down payment requirement at 3.5 percent.
The bill's attempt to provide greater GSE oversight is especially timely as news continues to break today concerning the plummeting prices of Fannie Mae and Freddie Mac stock on the New York Stock Exchange. The bill outlines the appointment of a new regulator who would be appointed by President Bush, confirmed by the Senate, and serve a five-year term, as well as create the establishment of an affordable housing fund and capital magnet fund, which would be funded by a 4.2 basis point fee on all new loans.
Other Provisions Include:
- The Creation of FHA Rescue: a voluntary program, capped at $300 billion for lenders to write down the loan balance in exchange for an FHA guaranteed loan, not to exceed 9 percent of the appraised value of the home.
- Tax Incentives: including an $8,000 tax refund for first-time home buyers.
- TILA Reform: such as requiring TILA disclosures to be delivered seven days prior to loan origination, and that disclosures include example of how payments would change based on rate adjustments.
- Empowering States: including appropriating $4 billion for states to purchase and renovate abandoned and foreclosed properties.
- Licensing: encouraging state officials to create a national licensing system for residential loan originations, with the clause that HUD will create their own system if states fail.Rachel Daniels
“Recognizing that crucial reforms are needed to stabilize and set the course for a recovery of the housing market, Chairman Dodd and Ranking Member Shelby have set partisanship aside and created consensus within their parties,” Quinn said. “I want to thank them, as well as the Senate leaders, for their hard work in getting this bill passed. This bill, if it becomes law, has the potential to be the most important piece of housing legislation in more than a decade.”
The bill outlines many overarching changes that would influence the current practices of the FHA, such as an appropriation to improve technology, processes, program performance, eliminate fraud and provide appropriate staffing, according to Quinn's statement. The bill would also increase FHA loan limits to 110 percent of the local median home price, not to exceed $625,000, and place the down payment requirement at 3.5 percent.
The bill's attempt to provide greater GSE oversight is especially timely as news continues to break today concerning the plummeting prices of Fannie Mae and Freddie Mac stock on the New York Stock Exchange. The bill outlines the appointment of a new regulator who would be appointed by President Bush, confirmed by the Senate, and serve a five-year term, as well as create the establishment of an affordable housing fund and capital magnet fund, which would be funded by a 4.2 basis point fee on all new loans.
Other Provisions Include:
- The Creation of FHA Rescue: a voluntary program, capped at $300 billion for lenders to write down the loan balance in exchange for an FHA guaranteed loan, not to exceed 9 percent of the appraised value of the home.
- Tax Incentives: including an $8,000 tax refund for first-time home buyers.
- TILA Reform: such as requiring TILA disclosures to be delivered seven days prior to loan origination, and that disclosures include example of how payments would change based on rate adjustments.
- Empowering States: including appropriating $4 billion for states to purchase and renovate abandoned and foreclosed properties.
- Licensing: encouraging state officials to create a national licensing system for residential loan originations, with the clause that HUD will create their own system if states fail.Rachel Daniels
