NEWS
BYTES
September 2007
from the hud.gov website
200,000 MORE FAMILIES COULD AVOID FORECLOSURE WITH CONGRESS'
HELP
Jackson letter to Congress: "Time to act on FHA reform
is now"
WASHINGTON - More than 200,000 families could avoid foreclosure
under pending legislation to reform HUD's Federal Housing Administration
(FHA). That was the message U.S. Housing and Urban Development
Secretary Alphonso Jackson is delivering to Congress as they
return from their August recess and consider legislation to
reform FHA's vital mortgage insurance programs.
On
Friday, President George W. Bush and Secretary Jackson announced
a new initiative called FHASecure, which will aid families who
are finding themselves in default when their mortgage interest
rates reset. Over the next two years, FHASecure and other FHA-backed
loans will help an estimated quarter of a million Americans
keep their homes. That's about half the families expected to
go into foreclosure during that time.
In
a follow-up letter to the chairmen of the Senate Banking Committee
and the House Financial Services Committee, Jackson said another
200,000 families could keep their homes if Congress moves quickly
to pass legislation reforming FHA. Jackson urged Senator Christopher
Dodd and Representative Barney Frank to make passage of an FHA
modernization bill a top legislative priority for the fall session.
"A
modernized FHA is a critical component of the Administration's
efforts to help more American families keep their homes during
the current market turmoil. With so many more families facing
increased mortgage payments every day, the time to act is now,"
Jackson said in his letter to Dodd and Frank.
Last
year, the Bush Administration proposed a set of changes to the
FHA program that would expand its reach by eliminating outdated
downpayment requirements and raising loan limits across the
country. The bill, the Expanding American Homeownership Act
of 2006, passed the House with overwhelming bipartisan support
in July 2006 by a vote of 415-to-7 and has been reintroduced
this year.
Since
1934, FHA has helped more than 35 million families become homeowners.
However, FHA has been unable to keep pace as lending practices
have evolved and modernized. If Congress enacts legislation
to reform this critical mortgage insurance program, FHA will
be able to better adapt to today's marketplace and serve as
a more viable solution to predatory lending and the exotic loan
market.
Below
is the full text of Secretary Jackson's letter to Senator Dodd
and Representative Frank:
September
5, 2007
Dear
Chairmen Frank and Dodd,
With
Congress returning this week from its August recess, I am writing
to urge you to make passage of a Federal Housing Administration
(FHA) reform bill, a top legislative priority for the fall session.
A modernized FHA is a critical component of the Administration's
efforts to help more American families keep their homes during
the current market turmoil.
On
Friday, August 31, I joined President Bush and Treasury Secretary
Henry Paulson in announcing FHASecure, a plan to allow the Federal
Housing Administration to make it easier for families with strong
credit histories who had been making timely mortgage payments
before their loans reset - but are now in default - to qualify
for refinancing. FHASecure will bring stability to the housing
market and give eligible families, who were in good financial
standing before their loans reset, a chance to keep their homes.
According
to industry estimates, there are just under 2 million resets
due in the next two years. About one quarter, or 500,000 of
those mortgages are going to default. Under FHASecure, we can
help approximately half or 240,000 of those hard-working families
stay in their homes without using any taxpayer dollars. If Congress
approves legislation to modernize FHA, as the President and
I have called for, we could help another 200,000 families get
into a safe, fair, and affordable FHA-backed loan.
I
know you share my strong support for modernizing FHA. With many
more families facing increased mortgage payments every day,
the time to act is now. Please know I stand ready to work with
you to pass a bipartisan, comprehensive FHA modernization bill
that will help many families realize and maintain the American
Dream of homeownership.
Sincerely,
Alphonso
Jackson
