Reps. Maxine Waters, D-Calif., and Michael E. Capuano, D-Mass., have reintroduced the FHA Emergency Fiscal Solvency Act, which is designed to strengthen the Federal Housing Administration (FHA) and ensure its long-term solvency.
According to the representatives, the provisions of the bill give the FHA more flexibility to take action against loan originators that engage in faulty underwriting or that have high loan losses. Additional measures include authorizing the agency to require indemnification for improperly written loans.
‘Working with the administration, we plan on drafting additional legislation to give the FHA more tools to bolster its insurance fund,’ says Waters (pictured left), who is the ranking member of the House Financial Services Committee. ‘This is an important first step and should be considered immediately, given that it was supported on such an overwhelming, bipartisan majority in the last Congress. It is time to move beyond discussion of this issue and take action.’
‘The House passed legislation reforming the FHA last year with the bipartisan support of 402 members,’ says Capuano, who is the ranking member of the House Subcommittee on Housing and Insurance. ‘There is clear agreement on the need to provide the FHA with additional risk management tools, increased transparency and enhanced reporting requirements. Let's move forward now with what we agree on and work together to make additional improvements.’