What's Done / Planned to Avoid FHA Bailout?

FHA has taken actions attempting to avoid what would be the first bailout in its long history:

FHA has taken action in several areas to control risk and raise revenues. Insurance premiums have been raised several times; credit was tightened by cutting back on seller payments at closing, raising credit scores, and lowering debt to income ratios. FHA also tightened oversight of lenders and stepped up enforcement of its rules.

Reuters notes that Senate Banking Committee Chairman Tim Johnson (D-SD) has been pushing for quick Senate approval of a bill that already passed the House which is aimed at reducing the FHA's need for a cash infusion. It would set a new minimum rate for insurance premiums, allow FHA to exclude poorly performing lenders, and tighten oversight of delinquent loans.

via House Members Seek FHA Financial Documentation in Letter to HUDs Donovan.


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