David Stevens, president and
CEO of the Mortgage Bankers Association (MBA), said the measure contains
“common-sense reforms” that will help the agency deal with a potential $1 billion shortfall in its insurance fund.
“As
we continue to analyze the bill, we may suggest some fine-tuning of
specific provisions,” Stevens said.
“We support the direction of this legislation and
look forward to working with the chairman and ranking member as the
committee considers their proposal in the coming days and weeks.”
Senate Banking Committee Chairman Tim Johnson
(D-S.D.) and ranking member Mike Crapo (R-Idaho) released a discussion
draft on Monday that strengthens underwriting standards, improves lender
accountability measures and overhauls the agency’s reverse mortgage
program.
The FHA, created nearly 80 years ago, has run
into financial struggles caused by the failure of bad loans made during
the period around the financial crisis.
Johnson has said
his committee would take up an FHA bill first before moving on to a
measure that would overhaul mortgage giants Fannie Mae and Freddie Mac.
Several
GOP members of the House Financial Services Committee last week
released a discussion draft that would deal with both issues together
and would require the FHA to become a self-sustaining entity, most
likely within about two years of enactment of a measure.
The FHA has
already taken some recommended steps to mitigate its losses. But the
Johnson-Crapo would provide more flexibility to bolster its balance
sheet and protect taxpayers from having to step in with a bailout, the
lawmakers said.