November 2nd, 2007 11:06 PM by Lehel Szucs
Here is some good news:
The U.S. Senate Banking & Finance Committee today agreed on compromise legislation that will make it easier for consumers to get Federal Housing Administration-backed loans. The Committee’s passage comes less than 24 hours after the U.S. House of Representatives overwhelmingly supported passage of similar legislation by a vote of 348 to 72. H.R 1852, otherwise referred to as “The Expanding American omeownership Act of 2007,” reforms the FHA mortgage insurance program in an effort to allow it to effectively compete in today’s housing market.
A significant component of the approved legislation is an amendment to increase the FHA loan limit to 125% of an area’s median home price capped at $729,750. H.R. 1852 was introduced by California Congresswoman Maxine Waters and the amendment to increase the loan limit was sponsored by Congressmen Gary Miller and Dennis Cardoza of California, along with Barney Frank of Massachusetts.
Other changes to the FHA program included in the H.R. 1852 are:
• Extends the mortgage term length from 35 to 40 years
• Allows FHA to insure zero-down mortgages in certain circumstances
• Allows the use of riskbased pricing when setting FHA mortgage insurance premiums
• Increases mortgage counseling for homebuyers to help them utilize the program, better educate them and help avoid foreclosure
• Increases the number of reverse mortgages lenders may do.
If the full Senate passes the legislation endorsed by the banking panel today, lawmakers from both chambers will write a compromise bill to be presented to U.S. President George W. Bush, who has said he wants reform. The actions taken by Congress this week give great cause for optimism. We must now continue to build on the momentum gained and increase our efforts to ensure successful passage of an FHA reform legislation that includes the loan limit increase provisions included in the House version of the bill.
We strongly encourage everyone to contact California’s two Senators in Washington today to express support for the passage of FHA reform that includes the loan limit increase provisions for high cost areas.
Please contact your California Senators today!
• Senator Barbara Boxer:
• Senator Dianne Feinstein: