[Congressional Record (Bound Edition), Volume 158 (2012), Part 12]
[Senate]
[Page 17116]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   FHA EMERGENCY FISCAL SOLVENCY ACT

  Mr. JOHNSON of South Dakota. Mr. President, today I wish to encourage 
my colleagues to pass the FHA, Emergency Fiscal Solvency Act, H.R. 
4264.
  Since 1934, the FHA has been helping stabilize the mortgage market by 
ensuring that qualified low-to-moderate income and first-time home 
buyers have access to mortgage credit. Since the beginning of the 
financial crisis, the FHA increased its market share from below 5 
percent in 2006 to approximately 30 percent at its peak volume in 2009 
in pursuit of that mission. This counter-cyclical expansion was 
essential to the mortgage market--especially for first-time homebuyers 
who comprised 78 percent of the single-family purchase loans insured by 
the FHA in 2011. According to Mark Zandi, Chief Economist at Moody's 
Analytics, without the FHA's counter-cyclical support, and I quote, 
``the housing market would have cratered, taking the economy with it.''
  However, the FHA is now facing a potential crisis of its own--but 
this time we have the opportunity to act. On December 6, I held a 
hearing in the Banking Committee entitled Oversight of FHA: Examining 
HUD's Response to Fiscal Challenges. Through the course of the hearing, 
HUD Secretary Shaun Donovan described how loans made from 2000 to 
2009--and especially those loans made at the height of the mortgage 
crisis from 2007-2009 before the ban on seller-funded downpayments took 
effect--were weighing heavily on the FHA's finances. As I stated in the 
hearing, I am very concerned about the FHA's condition and will not 
hesitate to take action to prevent the FHA from needing taxpayer 
support.
  This is only an immediate first step. I fully intend to engage my 
colleagues on and off the Banking Committee to find bipartisan 
consensus to provide the FHA with the additional authorities Secretary 
Donovan described during our hearing and address any technical fixes to 
this language. While this bill is not perfect and the path forward will 
not be easy, it is essential that we come together to protect taxpayers 
and this essential program.
  I yield the floor.

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