Released: October 27, 2007

FHA reform: Stuck in neutral?

Source: Kenneth R. Harney, Washington Post (Free Registration)

Distress in the mortgage market is generating a wave of relief bills on Capitol Hill, including one that would allow homeowners to tap into their retirement accounts - penalty-free - to bring their loans current or to refinance.

However, one major reform bill appears stuck in neutral: the Federal Housing Administration Modernization Act, which would raise loan limits in high-cost areas of California and the East Coast and reduce required down payments. It is considered a crucial relief measure for consumers who need to refinance out of adjustable-rate loans into lower-cost, fixed-rate mortgages. Approved by the Senate Banking Committee on Sept. 19, it was the subject of bold promises for quick passage. But it hasn’t been heard of since.

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