The House Financial Services Committee approved two measures on Tuesday, April 27, that will alter the landscape for home mortgage insurance.
In one measure, the committee took a step to bolster the finances of the Federal Housing Administration. The committee approved a measure to strengthen the FHA’s finances by giving it authority to raise annual mortgage insurance premiums. The bill would raise the cap of annual premium payments collected by the FHA from 0.50% to 1.5%.
Rep. Maxine Waters (D-California), Chairwoman of the Housing and Community Opportunity Subcommittee, drafted the FHA Reform Act of 2010 (H.R. 5072) in response to the housing crisis that caused the FHA’s Capital Reserve Account to fall below the 2% level required by law. The Act will empower the FHA to improve its financial position by allowing the agency to adjust its premium structure for new borrowers.