Senate OKs Bill Boosting FHA Commitment

The Senate has approved final passage of an omnibus appropriations bill that increases FHA's commitment level to $315 billion for this fiscal year, up from $185 billion in FY 2008. Ginnie Mae, which securitizes Federal Housing Administration and other government-backed mortgages, also is getting a $100 billion increase in its commitment level to $300 billion. Lenders originated $66.4 billion in FHA single-family loans in the fourth quarter of FY 2008, which ended Sept. 30. In the first quarter of FY 2009, FHA endorsements totaled $71.9 billion. It appears FHA loan production could easily hit $300 billion as many lenders are using FHA loans to modify and refinance nonprime loans. Congressional appropriators allotted $13 million to the HUD Inspector General to keep a closer watch on the FHA single-family program. The appropriators also instructed the Government Accountability Office to determine whether the Inspector General's office has enough resources to audit FHA's "expanded role" in refinancing subprime, Alt A and other home mortgages.