HUD: FHA Reform Best Subprime Cure

The best way to "cure" the serious problems in the subprime market is to pass Federal Housing Administration reform legislation that will allow lower-income homebuyers to get safer and affordable loans, HUD Secretary Alfonso Jackson has told a congressional panel."All you have to do is read the news articles to recognize that New Century and others created serious problems in the subprime market," the secretary of the Department of Housing and Urban Development testified. The FHA single-family reform bill would give the agency more flexibility in setting mortgage insurance premiums and downpayment requirements so it can serve more subprime borrowers. "I am convinced that is the best way to save" those homeowners, Secretary Jackson said. The HUD secretary also told the House panel that discussions with industry groups could soon lead to a consensus on reform of the Real Estate Settlement Procedures Act. "I think we are pretty close," he said.