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An interesting recent article by Jeanne Sahadi over at CNNmoney.com indicated that the White House will be applying the pressure here at the start of ’08 for congress to get a FHA reform bill for him to approve. Here is an excerpt:

NEW YORK (CNNMoney.com) — Criticized for not doing enough to stave off foreclosures, the White House seems prepped to put on a full-court press in dealing with the housing crisis.

President Bush last weekend said he will push Congress this year “to act quickly” on proposals he supports.

Some of them are designed to have an immediate impact, such as efforts to make the refinancing of subprime loans easier and more affordable, and to make it easier for all homebuyers to get financing. Another proposal focuses on putting a stop to abusive lending.

Efforts implemented so far include a Treasury-coordinated rate-freeze plan for some subprime borrowers, and tax relief on breaks that homeowners get from lenders in foreclosure.

It’s not likely all of the proposals that Bush would support will gain passage in 2008. Here’s a look at the prospects for four such initiatives:

FHA reform

One initiative with a very good chance of being sent to President Bush’s desk for his signature in the first half of the year is reform of the Federal Housing Administration loan program, said Jaret Seiberg, an analyst at the policy research firm Stanford Group.

The FHA program is intended for home buyers and home owners with weak credit. Borrowers with FHA-insured loans – which they get from private lenders as they would any other mortgage – pay a small premium to the FHA every month. The FHA, in turn, uses those premiums to cover the lender in the event of foreclosure and requires lenders to pursue viable ways to help borrowers avoid foreclosure.

FHA reform would liberalize the loan program guidelines by lowering down payment requirements, increasing the cap on loans eligible to be FHA-insured and lowering origination fees, among other things.

Both the House and Senate have passed their own versions of FHA reform, and Seiberg expects lawmakers will come to agreement on a consensus bill in the first few months of the year.

Comments (0) Posted by G.R.A. Admin on Thursday, January 3rd, 2008

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