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FHA Emergency Fiscal Solvency Act of 2012

Floor Speech

By:
Date:
Location: Washington, DC

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Mrs. BIGGERT. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, H.R. 4264, the FHA Emergency Fiscal Solvency Act of 2012, will provide the tools necessary to ensure the financial soundness of the Federal Housing Administration, or FHA. Right now, FHA is well below its mandatory 2 percent capital reserve with only .24 percent to cover losses.

The administration's fiscal year 2013 budget recently admitted that the FHA
may need a $688 million taxpayer bailout because of the depleted capital reserve fund. Last Friday, September 7, HUD issued its FHA quarterly report, which said that it anticipates increased foreclosures, claim activity, and related expenditures.

The FHA has had an abysmal fiscal track record and, to top it off, recent data furnished by the GAO confirmed that the FHA represents about 75 percent of the insured mortgage market. FHA is a government program that has put taxpayers at significant risk and flies in the face of private capital returning to the housing financial market.

The FHA Emergency Fiscal Solvency Act will provide FHA with the tools that it needs to shore up the program, lower the program's risk, and reduce taxpayers' liabilities.

The bill would establish for the first time a minimum annual premium of 55 basis points and allow FHA to charge up to 2.05 percent. It would strengthen FHA's ability to recoup losses from lenders for fraudulent, misrepresented and early delinquent loans, and it would allow FHA on a nationwide basis to terminate bad lenders. It also codifies the position of FHA Deputy Assistant Secretary for Risk and establishes a chief risk officer for Ginnie Mae.

These are commonsense targeted changes that would ensure accountability and financial stability within the FHA. On March 27, the Financial Services Committee unanimously passed this bill, and I would urge my colleagues to support H.R. 4264.

I reserve the balance of my time.

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