[Congressional Record Volume 153, Number 139 (Wednesday, September 19, 2007)]
[Extensions of Remarks]
[Pages E1924-E1925]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page E1924]]
              EXPANDING AMERICAN HOMEOWNERSHIP ACT OF 2007

                                 ______
                                 

                               speech of

                          HON. RUBEN HINOJOSA

                                of texas

                    in the house of representatives

                      Tuesday, September 18, 2007

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 1852) to 
     modernize and update the National Housing Act and enable the 
     Federal Housing Administration to use risk-based pricing to 
     more effectively reach underserved borrowers, and for other 
     purposes:

  Mr. HINOJOSA. Madam Chairman, today the House passed H.R. 1852, the 
``Expanding American Homeownership Act of 2007.'' I am in favor of the 
bill and am submitting the following letters in support of the 
legislation for the Record: A letter from the National Association of 
Realtors; a letter from the Mortgage Bankers Association; and a letter 
from the National Association of Mortgage Brokers.

                             National Association of Realtors,

                               Washington, DC, September 14, 2007.
     House of Representatives,
     Washington, DC.
       Dear Representative: On behalf of the 1.3 million members 
     of the National Association of REALTORS, I urge you to 
     support H.R. 1852, the ``Expanding American Homeownership Act 
     of 2007'', when the bill is considered by the full House. 
     This is an important measure that will allow FHA to function 
     in the 21st century. Equally important and worthy of your 
     strongest support is an amendment to be offered by 
     Representatives Barney Frank (D-MA), Gary Miller (R-CA) and 
     Dennis Cardoza (D-CA) that is vital to improving the 
     stability of mortgage markets, a critical component of our 
     national economy.
       The Frank/Miller/Cardoza amendment would increase the 
     Federal Housing Administration (FHA) loan limits beyond the 
     language originally included in H.R. 1852. Such an increase 
     is now needed in light of the significant housing and 
     mortgage market turmoil that has severely limited the ability 
     of families to refinance a problematic existing loan or, 
     alternatively, purchase a home in a high cost market with a 
     safe and affordable mortgage.
       As you well know, many American homeowners now have 
     mortgages with payments that will soon increase dramatically, 
     putting them at risk of foreclosure. Raising the FHA loan 
     limits will provide many of these homeowners living in the 
     nation's high housing cost markets with a safe FHA loan 
     alternative. In addition, with the even more recent 
     tightening of the jumbo market, many homebuyers may not be 
     able to find a safe, affordable financing option without an 
     increase in the FHA loan limits.
       Although the underlying bill would increase the loan 
     limits, we strongly believe that the Frank/Miller/Cardoza 
     amendment is needed to effect real change. H.R. 1852 creates 
     a new loan ceiling of $417,000. Many markets are 
     significantly higher than this limit. Median home prices of 
     communities in New York, New Jersey, Connecticut, California, 
     Massachusetts, and Pennsylvania are already far above this 
     limit. The Frank/Miller/Cardoza amendment creates geographic 
     fairness by raising the loan limit to 125% of the area median 
     home price. Under the amendment working families in Newark, 
     NJ can buy a home for $512,000, and families in Los Angeles, 
     CA can buy homes for $650,000--both median price homes for 
     their area.
       FHA reform is needed now, more than ever. Please vote for 
     H.R. 1852 and the Frank/Miller/Cardoza amendment when these 
     measures come to the Floor.
           Thank you,

                                                 Pat V. Combs,

                                                   2007 President,
     National Association of Realtors.
                                  ____



                                 Mortgage Bankers Association,

                               Washington, DC, September 17, 2007.
     Hon. Steny H. Hoyer,
     Majority Leader, House of Representatives, Washington, DC.
     Hon. John A. Boehner,
     Republican Leader, House of Representatives, Washington, DC.
       Dear Leader Hoyer and Leader Boehner: On behalf of the 
     Mortgage Bankers Association (MBA), I am writing to express 
     our strong support for H.R. 1852, the Expanding American 
     Homeownership Act of 2007, and strongly urge Members of the 
     House of Representatives to support the legislation when it 
     comes to the House floor. At the same time, MBA is also 
     concerned about a provision that would liberalize the 
     requirements for mortgage broker participation in FHA, as 
     well as certain amendments that may be offered. Passage of a 
     strong and workable FHA bill is critical in addressing the 
     current market situation and consumer needs.
       H.R. 1852, introduced by Representative Maxine Waters, 
     passed the Committee on Financial Services by a bipartisan 
     vote of 45-19 on May 3, 2007. The legislation has been under 
     consideration for several years now, and similar legislation 
     passed the House of Representatives in 2006 by a vote of 415-
     7.
       The Expanding American Homeownership Act of 2007 would 
     achieve several key public policy goals. The bill will make 
     it easier for first-time homebuyers and lower-income 
     Americans to purchase a home by modernizing the Federal 
     Housing Administration (FHA) and giving it the ability to 
     offer viable products in today's changing mortgage market. 
     The bill ensures investment in FHA's personnel and 
     technology, bringing this important mortgage insurer into the 
     21st century.
       The bill would increase FHA's loan limits, allowing FHA-
     insured lending in states and communities where today's 
     housing prices make FHA mortgage products unavailable to 
     borrowers. The bill also gives FHA's management additional 
     flexibility to offer new mortgage products without getting 
     Congress' blessing each time. Since FHA's programs actually 
     generate more funds for the U.S. Treasury than it pays out in 
     claims and administrative costs, the bill would establish 
     that a portion of the excess funds be put aside for new 
     affordable housing production through an affordable housing 
     trust fund, which we support.
       Since this bill last passed the House in 2006, we have seen 
     significant disruptions in the nation's housing market. In 
     particular, many homeowners are finding themselves in 
     distress, unable to pay their adjustable rate mortgages after 
     interest rates have steadily increased and home values have 
     declined in some areas. FHA can be an important tool to help 
     these consumers get out of financial trouble. If this bill 
     should become law, many more borrowers will be able to use 
     FHA's products to avoid foreclosure.
       A significant area of concern we continue to have with this 
     legislation deals with how mortgage brokers will qualify to 
     sell FHA-insured products. Under current guidelines, all 
     mortgage brokers and loan correspondents must submit audited 
     financial statements that are in accordance with the 
     Government Accountability Office's Government Auditing 
     Standards. HUD program managers, in turn, use these audits to 
     determine if these entities use internal controls to provide 
     reasonable assurance that FHA requirements are followed, 
     expend federal funds properly with supporting documentation 
     and meet fair housing and nondiscrimination requirements. At 
     a time of rising defaults, it is critical to both FHA and its 
     customers that adequate supervisory processes remain in 
     place. In Committee, MBA opposed the bill's provisions that 
     would eliminate this important audit requirement and thereby 
     weaken the FHA's safety and soundness. We hope to continue to 
     work with the Committee and the House on this issue as the 
     bill moves through the legislative process.
       We understand that a series of amendments to the 
     legislation may be made in order. We believe that it would be 
     unwise to require counseling for borrowers as provided for in 
     an amendment filed by Representative Patrick Tiberi. First, 
     it is expensive, and for many homebuyers, completely 
     unnecessary. Second, many real estate agents and mortgage 
     brokers will push homebuyers away from an FHA product if a 
     home purchase could fall through because the potential buyer 
     has to wait several weeks or more to arrange a counseling 
     session. Counseling should be targeted to those who need it, 
     and we believe the bill, as written, strikes the right 
     balance in giving the HUD Secretary significant tools to help 
     consumers get the counseling they need. The point of this 
     bill is to empower FHA to make its products more useful to 
     the market and borrowers. Mandating counseling would have the 
     opposite effect.
       Another possible amendment, expected to be offered by 
     Financial Services Chairman Barney Frank, Representative Gary 
     Miller and Representative Dennis Cardoza, would increase the 
     FHA loan limit to a level above the GSE conforming loan limit 
     in certain high-cost areas. We believe that FHA should 
     continue to focus on helping low- and moderate-income 
     borrowers purchase or refinance housing. Without further 
     study on the impacts of such a change, we do not believe 
     it would be wise to allow FHA loan limits to exceed GSE 
     conforming loan limits.
       Finally, an amendment may be proposed that would allow 
     qualified downpayment assistance programs to continue if 
     certain conditions are met. Downpayment assistance programs 
     are an important part of the FHA program, but some changes 
     are needed to avoid continued abuses. We believe that the 
     changes made by Representative Gary Miller's amendment would 
     mark a significant improvement in how these programs operate.
       Thank you for the opportunity to share our views on this 
     legislation. We urge Members of the House of Representatives 
     to support this important legislation.
           Sincerely,
                                             John M. Robbins, CMB,
     MBA Chairman.
                                  ____

                                           National Association of


                                             Mortgage Brokers,

                                               September 17, 2007.
       Dear Representative: On Tuesday, the United States House of 
     Representatives will vote on H.R. 1852, the ``Expanding 
     American Homeownership Act of 2007'' introduced by Rep. 
     Maxine Waters (D-CA) and House Financial Services Committee 
     Chairman Barney Frank (D-MA). On behalf of the National 
     Association of Mortgage Brokers (NAMB), its 49 state 
     affiliates, 25,000 members/member companies, and hundreds of 
     thousands of mortgage brokers, I respectfully urge you to 
     support passage of this much-needed legislation to help the 
     millions of Americans who are in need of safe and affordable 
     mortgage products.
       The need to reform and enhance the Federal Housing 
     Administration (FHA) is critical so that it can respond 
     adequately to the needs of consumers and the market today. 
     H.R. 1852 includes provisions that will:

[[Page E1925]]

       Strengthen the FHA program by raising FHA mortgage limits 
     nationwide in all communities, but especially in high-cost 
     areas where consumers are most often in need of affordable 
     mortgage financing options;
       Allow FHA to offer flexible down payment terms and simplify 
     the down payment process to aid homebuyers in overcoming a 
     significant barrier to homeownership;
       Allow FHA to price loans according to a borrower's risk;
       Update FHA's successful reverse mortgage program; and
       Increase the availability of FHA loan products to first-
     time, minority and low- to moderate income homebuyers by 
     expanding the distribution channels that serve FHA.
       NAMB supports H.R. 1852 as approved by the House Financial 
     Services Committee earlier this year, but also favors a 
     further increase in the FHA loan limits as proposed by an 
     amendment expected to be offered by Chairman Frank (D-MA) and 
     Reps. Miller (R-CA) and Cardoza (D-CA). Unfortunately, 
     because FHA has been driven from those parts of the country 
     where consumers are most in need of affordable financing, 
     such as California, millions of borrowers have been forced to 
     turn to high-cost financing and other non-traditional loan 
     products. I urge you to support the bi-partisan amendment 
     offered that calls for a further increase in FHA loan limits 
     from $417,000 to $500,000, in order to better accommodate 
     those borrowers living in high-cost areas of the country.
       NAMB believes the reforms contained in H.R. 1852 will 
     provide long-overdue modernization to the FHA, which will 
     revitalize and increase participation in the FHA program. 
     Please take this opportunity to restore confidence and 
     stability in the mortgage market and once again make FHA 
     loans a real choice for borrowers by voting in support of 
     H.R. 1852.
           Sincerely,
                                        George Hanzimanolis, CRMS,
                                                President of NAMB.

     

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