NRMLA is pleased to announce that on Tuesday evening the U.S. House of Representatives passed the Expanding American Homeownership Act of 2006 (H.R. 5121), which would make substantial improvements to the FHA HECM program. President Bush issued an immediate statement http://www.whitehouse.gov/news/releases/2006/07/20060726.html thanking the House of Representatives for passing H.R. 5121 (referred to by mortgage industry trade groups as the FHA modernization bill) and urged the Senate to pass its own version, known as S. 3535.

H.R. 5121, which passed 415-7, would create a single national loan limit for the HECM program equal to the conforming Freddie Mac loan limit ($417,000 in 2006); establish a “home purchase” option that would allow people to use a reverse mortgage to purchase newer housing that better suits their needs; and remove the volume cap on the number of HECM loans that FHA can insure.

Two amendments were added to the bill which are noteworthy. The first amendment would make a technical change to existing law that would give HUD the ability to insure HECM loans on co-ops. The second amendment would require HUD to study the mortgage insurance premiums charged on a HECM loan.

The Senate Banking, Housing and Urban Affairs Committee conducted a public hearing on June 20 to discuss the future of FHA and the key aspects of S. 3535, but no additional hearings or votes have been scheduled. In case the Senate fails to act on S. 3535, NRMLA has already developed a contingency plan.

Two key provisions from the FHA modernization bill– volume cap elimination and HECM for home purchase–were added into the Fiscal Year 2007 HUD appropriations bill (H.R. 5576), which the House of Representatives approved on July 9. The Senate is considering its own HUD appropriations bill that would eliminate the volume cap, and require the Secretary of HUD to study the geographic distribution of HECM loans insured by FHA.

While these developments are clearly positive, NRMLA still has a lot of work ahead of us. We will provide additional updates as they occur.

Remind your senators how important the passage of this bill is to their largest voting population- SENIORS!

Valerie VanBooven RN, BSN, PGCM
Director of Marketing and PR
Next Generation Financial Services

This entry was posted on Friday, July 28th, 2006 at 11:17 am and is filed under Reverse Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.