The Federal Housing Administration (FHA) Fiscal Solvency Act of 2012 has been passed by the full House of Representatives by a vote of 402-7. The Fiscal Solvency Act includes provisions to strengthen and broaden the ability of the U.S. Department of Housing & Urban Development (HUD) to avoid or recoup losses for loans originated or underwritten by a mortgage lender which did not comply with FHA guidelines, as well as expand HUD’s ability to terminate the authority of poorly performing lenders to participate in FHA programs.
“We are pleased that the bill passed by the House includes provisions that will allow FHA to continue its efforts to strengthen its enforcement capabilities in order to protect its insurance fund and American taxpayers,” said Acting FHA Commissioner Carol Galante. “We look forward to continuing to work with both chambers to enact final legislation to provide FHA with the tools it needs to build on the vital reforms implemented by this Administration.” Read More
This bill also gives HUD the authority to charge up to a maximum premium of 2.05 percent annually on mortgage insurance (MI) and establishes a minimum annual premium for MI of 0.55 percent. Right now, the annual mortgage insurance (MI) premium is a maximum of 1.25 percent.