Senate Banking Committee Reports FHA Lending and GSE Regulatory Overhaul Bill

May 20, 2008

The Senate Banking Committee reported The Federal Housing Finance Regulatory Reform Act of 2008; H.R. 634, by a vote of 19-2. This bill will authorize the Federal Housing Authority (FHA) to refinance loans for borrowers who have existing subprime loans. It is a voluntary program for lenders to write down the balance on existing loans to 80% of the current market value of the property, and the FHA will refinance at that rate. The bill also includes the regulatory overhaul of the Government Sponsored Enterprises (Fannie Mae, Freddie Mac(GSEs)), and Federal Home Loan Banks. The bill includes language supported by ALTA on new product approval that will prevent "mission creep" by the GSE's into areas currently being served by the private markets. Click here to read the Committee's press release on the agreement and the bill.