House Will Raise FHA Commitment Authority

Expecting another big year for the FHA single-family insurance program, House appropriators are increasing the agency's commitment level to $315 billion, a 70% improvement from last year. Lenders originated $171.8 billion in Federal Housing Administration loans in FY 2008, which ended September 30. In the first quarter of FY 2009, FHA single-family endorsements totaled $71.9 billion, compared to $21.4 billion for the same period a year earlier. The House of Representatives is slated to vote on an omnibus appropriations bill this Wednesday (Feb. 25) that increases commitment levels for the Government National Mortgage Association and FHA. Meanwhile, appropriators have allotted the HUD Inspector General an extra $13 million to keep a closer watch on FHA, focusing on new programs, including the 'Hope for Homeowners Now' initiative which helps consumers refinance their underwater mortgages. On Thursday, the House is expected to vote on a bill (H.R. 1106) to make the H4H program more attractive to borrowers and servicers. H.R. 1106 also includes provisions to allow bankruptcy cramdowns, shield servicers engaged in loan modifications from investor lawsuits, and bolster the federal deposit insurance programs for banks and credit unions.