Jackson Supports FHA Reform Bill

Housing secretary Alphonso Jackson said the Federal Housing Administration will be able to help "hundreds of thousands" of distressed subprime borrowers refinance into affordable FHA loans if Congress passes an FHA reform bill this summer.The Department of Housing and Urban Development secretary noted that 80% of subprime loans are sound. But the other 20% are "headed for trouble" and the borrowers will have difficulty making their payments once the loans reset. "If we can get FHA modernization legislation passed quickly, we can probably address 70% to 80% of those [troubled] loans," Mr. Jackson told the National Press Club. Otherwise, FHA's ability to help will be limited to "tens of thousands" of subprime borrowers. "We need this reform now. President Bush and I have repeatedly urged Congress to act," the HUD secretary said.