[Congressional Record Volume 156, Number 87 (Thursday, June 10, 2010)]
[Extensions of Remarks]
[Page E1069]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         FHA REFORM ACT OF 2010

                                 ______
                                 

                               speech of

                          HON. LORETTA SANCHEZ

                             of california

                    in the house of representatives

                        Wednesday, June 9, 2010

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 5072) to 
     improve the financial safety and soundness of the FHA 
     mortgage insurance program:

  Ms. LORETTA SANCHEZ of California. Madam Chair, I rise in support of 
H.R. 5072, the FHA Reform Act of 2010. This legislation will, among 
many provisions, allow FHA to adjust its premium structure for new 
borrowers, while continuing to provide services to the communities it 
was intended to serve. Unfortunately, the economic crisis--the national 
housing prices decline, unemployment, and loan losses--led to the FHA's 
capital reserves falling below the two percent level required by law. I 
believe, the changes my colleagues and I will make to this program will 
help ensure its success in the long term, while reducing federal 
spending and saving taxpayers $2.5 billion dollars over the next five 
years.
  The FHA Reform Act of 2010 will ensure FHA continues its role as a 
key stabilizing force in the market and support sustainable 
homeownership for first-time buyers and underserved markets. That said, 
I believe the FHA will help keep the recovery of our country on track 
by playing a central role in the housing finance system for some time 
before it scales back to its role as private capital returns.
  H.R. 5072 will also grant FHA the authority to terminate lenders' 
approval to originate or underwrite loans backed by FHA insurance when 
FHA finds evidence of fraud or noncompliance. Unfortunately, in the 
second half of 2009, 2,357 default notices were issued to my 
constituents in the cities of Anaheim, Fullerton, Garden Grove, and 
Santa Ana. For this reason, it's imperative that FHA is reformed, so my 
constituents seeking to become homeowners are afforded the opportunity 
to do so from a safe and trustworthy source.
  This bill is important to my constituents and many other Americans 
struggling to keep their homes.
  I urge my colleagues to support this bill.

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