Expanding American Homeownership Act of 2007

Floor Speech

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Mr. HINOJOSA. Madam Chairman, I rise in strong support of H.R. 1852, the Expanding American Homeownership Act of 2007, introduced by Congresswoman Maxine Waters, who has worked so hard on this legislation.

I want to commend my good friend from California for introducing such an important piece of legislation and for helping me and the Congressional Rural Housing Coalition find ways to provide housing for all Americans, including those in rural America. She has found numerous ways to improve the availability, affordability and quality of housing; and this legislation advances that cause.

Madam Chairman, this legislation, H.R. 1852, will modernize and update the National Housing Act and enable the Federal Housing Administration to use risk-based pricing to more effectively reach underserved borrowers. It will also provide a safe alternative for potential home buyers with less than perfect credit, thus helping them avoid the pitfalls of certain subprime lending and, hopefully, reduce a large portion of predatory lending.

This legislation is very important to working families. Hundreds of thousands of American families are concerned about losing their homes as their mortgage payments increase because of subprime loans with adjustable interest rates. With strong efforts to assist them, up to the 40 percent of families with subprime loans could qualify for more affordable fixed-rate loans so they can keep their homes.

As co-chair and co-founder of the Financial and Economic Literacy Caucus, I am particularly pleased that the legislation contains a housing counseling provision. It is a long time coming.

I want to express my sincere appreciation to Chairwoman Maxine Waters for introducing such important legislation.

Madam Chairman, I submit for the Record letters from the American Bankers Association and the National Association of Home Builders in support of H.R. 1852.

For these reasons, I strongly urge my colleagues to vote ``yes.''

September 18, 2007.
To: Members of the U.S. House of Representatives.
From: Floyd Stoner, Executive Director, Congressional Relations & Public Policy, ABA.
Re Support for H.R. 1852, the Expanding American Homeownership Act of 2007.

I am writing to you on behalf of the members of the American Bankers Association (ABA) to express our support for H.R. 1852, the Expanding American Homeownership Act of 2007, scheduled for House consideration today. This legislation reforming the Federal Housing Administration (FHA) will make the FHA a strong, relevant tool to help banks and other lenders to bring homeownership to more Americans for years to come. These reforms are more necessary now than ever, as FHA can play an important role in addressing current problems in the mortgage markets.

The FHA was created in 1934 to serve as an innovator in the mortgage market. Since then, FHA, in a public/private partnership with banks and others in the lending community, has assisted nearly 35 million Americans become homeowners. Unfortunately, statutory limitations and lack of flexibility caused FHA to become less relevant to the industry. The legislation before the House of Representatives makes necessary changes to improve the efficiency of the FHA, increase the nation's homeownership rate, increase competition in the lending market, and provide borrowers with a much needed option in the current tight credit market.

Specifically, ABA supports provisions that: (1) simplify the downpayment process and offer borrowers flexible downpayment options; (2) extend the mortgage term of an FHA insured loan to 40 years; (3) increase the FHA loan limits; and (4) modernize the Home Equity Conversion Mortgage Program. These changes will again make the FHA an important partner with the private market and will help to ensure that more borrowers are able to benefit from FHA insurance.

We urge you to support this reform of FHA to better serve homebuyers by supporting H.R. 1852 when it comes to the House floor.

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NATIONAL ASSOCIATION

OF HOME BUILDERS,

Washington, DC, September 17, 2007.
Hon. NANCY PELOSI,
Speaker, House of Representatives,
The Capitol, Washington, DC.

DEAR SPEAKER PELOSI: On behalf of the 235,000 members of the National Association of Home Builders (NAHB), I am writing to express the building industry's support for H.R. 1852, the Expanding American Homeownership Act of 2007. NAHB urges you to support this bill, which modernizes the Federal Housing Administration (FHA), when it comes to the House floor next week. Because of the importance of this issue to our industry, we are designating the vote on passage of H.R. 1852 as a KEY VOTE.

NAHB also supports the Frank/Miller/Cardoza amendment that will further enable home buyers the ability to purchase an FHA-insured home in many high-cost areas. Currently, the FHA loan limit is too low to enable many deserving home buyer to purchase a home in high-cost areas.

Since its creation in 1934, and for much of its existence, the FHA has been viewed as a housing finance innovator by insuring millions of mortgage loans, which have made it possible for America's families to achieve homeownership. FHA's single family mortgage insurance programs have served home buyers in all parts of the country during all types of economic conditions. Moreover, FHA has done this without any cost to America's taxpayers.

Unfortunately, over the past two decades, the popularity and relevance of FHA's single family mortgage insurance programs have waned as FHA's programs have failed to keep pace with competing conventional mortgage loan programs. Faced with a deepening constriction in the availability and affordability of housing credit, Congress now has the opportunity to modernize the FHA and enable it to play a key role in stabilizing the mortgage markets, while offering borrowers a safe and fair mortgage alternative. Recently, President Bush outlined a plan to help American homeowners weather the current difficulties in mortgage markets, which included asking Congress to send him an FHA reform bill as soon as possible.

To address the problems in today's housing finance market, I urge your support for H.R. 1852 on the House floor this week. Again, NAHB will KEY VOTE the vote on passage of H.R. 1852. Thank you for considering the views of the home building industry.

Sincerely,

Joseph M. Stanton,
Chief Lobbyist.

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