As we reported yesterday, the Senate has approved the revised H.R. 3221 legislation, and it now needs only President Bush’s signature to be enacted into law. Since its passage on Saturday, many have voiced their support of the measure.
In a statement issued by the Mortgage Bankers Association (MBA), its chairman Kieran P. Quinn, CMB, praised party leaders in both congressional chambers for finalizing the bill. Quinn added, “For nearly a decade, FHA modernization and GSE oversight reform have topped MBA's legislative and advocacy agenda. Harmonizing the low income housing tax credit with FHA's multi-family insurance programs will help spur the development of more affordable housing. The bill also contains important tax incentives designed to encourage home buyers to get off the sidelines and into the market.”
Sandy Dunn, president of the National Association of Home Builders (NAHB), said, “For the past year, NAHB has been in the forefront in pushing for legislation to address the turmoil in the financial and housing markets, and to bolster the nation’s economy. This landmark bill contains several provisions to help home buyers, stop the slide in home prices, provide a lifeline to borrowers facing foreclosure, improve mortgage liquidity, and bolster confidence in Fannie Mae and Freddie Mac.”
Also referring to the bill as “landmark,” Kurt Pfotenhauer, CEO of the American Land Title Association (ALTA) remarked that the bipartisan legislation would help prevent further damage to an already shaky housing market.
As president of the U.S. Conference of Mayors, Miami’s mayor Manny Diaz urged President Bush to sign the act immediately. “We stand ready to work with Washington as we go forward to stabilize our neighborhoods and further assure that millions of Americans are provided a federal government that will never again permit the pain and economic hardship caused to millions of our people by the current home mortgage crisis.”
Although there has been broad support for the new housing legislation, there are some provisions that still remain part of the bill which have been criticized in the past. The revised legislation increases down payment requirements for Federal Housing Authority (FHA) loans, from 3.0 percent to 3.5 percent, and it prohibits seller-funded down payment assistance (DPA), both direct or through a third party.
Secretary Steve Preston of the Department of Housing and Urban Development (HUD) was one of the few to speak out against portions of the new housing legislation last week.
Preston said that while the bill takes important steps to provide stability and confidence in the institutions that support affordable mortgages for all Americans, it denies these same institutions the proper tools to help more troubled homeowners. He cited recent efforts by the Federal Housing Authority (FHA) to expand its ability to refinance homeowners trapped in subprime adjustable rate mortgages and the organization’s implementation of a fairer, more flexible pricing structure.
“Unfortunately, this legislation would ban FHA’s ability to charge differential pricing,” Preston said. “Now, FHA would be required to increase prices on all customers or eliminate its refinancing program for subprime borrowers at a time when they need it the most.”
The FHA currently has 4.8 million insured single-family mortgages and 13,000 insured multi-family mortgages in its portfolio.Carrie Bay