[Congressional Record Volume 156, Number 87 (Thursday, June 10, 2010)]
[Extensions of Remarks]
[Page E1075]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         FHA REFORM ACT OF 2010

                                 ______
                                 

                               speech of

                         HON. CHRIS VAN HOLLEN

                              of maryland

                    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:

  Mr. VAN HOLLEN. Madam Chair, I want to thank Chairman Frank and 
Chairwoman Waters for their efforts in bringing this important and 
necessary piece of legislation to the floor today.
  As a result of the economic crisis, the Federal Housing 
Administration had to step in to fill the void that emerged when large 
numbers of homeowners experienced difficulty finding private companies 
willing to insure their mortgages. While increasing the number of loans 
it insured helped the FHA put more borrowers into new homes, it also 
severely depleted its capital reserves--causing them to fall below 
congressionally mandated levels.
  One of the FHA's responsibilities is to provide mortgage insurance 
for low-income homeowners who otherwise would have difficulty accessing 
insurance. By providing insurance on loans made by approved lenders, 
the FHA has been able to guarantee the availability of inexpensive 
mortgages and help approximately 37 million borrowers. To insure that 
FHA has the resources necessary to continue performing this important 
function, Congress requires the FHA to maintain capital reserves of at 
least 2 percent. Under the economic strain of the past couple of years, 
these reserves have fallen well below that level. Even though the 
Department of Housing and Urban Development has taken significant 
administrative and regulatory steps to address the shortfall, as an 
added measure, the FHA has requested that Congress grant it the 
legislative authority to adjust its premium structure.
  The bill we are voting on today provides the FHA with new authority 
to raise the annual premiums it receives from new borrowers with 
mortgages at or below 95 percent of the home's value. If this bill 
passes, FHA will be permitted to raise the premiums it receives on 
mortgage insurance to up to 1.55 percent of the loan balance. This move 
should enable the FHA to raise the funds it needs to restore its 
capital reserves to financial healthy levels--so that it can continue 
providing mortgage insurance to new home owners for many years to come.
  Congress is committed to doing whatever it takes to get this economy 
going again, to get Americans back to work, to enable them to buy cars 
and homes and to start businesses. Our legislative efforts have taken 
many forms from small business tax cuts, to financial services industry 
reform to the measure we are considering here today.
  This is important legislation that will help the economy by helping 
many borrowers seeking mortgage insurance. I urge my colleagues to join 
me in supporting this bill.

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