Date: 2007-09-18
Speaker: GARY G. MILLER (republican)
Chamber: H
State: Califor

Madam Chairman. I rise in strong E port of this bill. Id like to comm Chairman BARNEY FRANK and Rank Member BACHUS and Subcommit Chairman MAXINE WATERS and Ra ing Member JUDY BIGGERT for t] hard work. This has been a long t: coming. If you watch what the Federal serve is doing today. theyre inject shortterm dollars into the marl place trying to stabilize the marl place. But what the marketplace housing needs today is longterm lars and revenues to ensure that pe( can own a home and get a longti loan and pay that back. When I talk to brokers and lender my district. it is clear that the ]P for program as currently structured has me- not kept pace. In the past. moderateto income home buyers who could not F it qualify for. conventional loans because Luse of high loan to value ratios or high Ius- payment to income ratios could still .age achieve the dream of homeownership through the FHA program. ler/ Today. the FHA program is no longer able HA- a useful product to home buyers. Inlur- stead. working families are faced with en- a situation where they are either unhase able to own a home. or theyre forced to resort to a risky loan product that [I of might make their ability to keep the is a nil- home difficult. .e it With all this occurring in the [eve subprime market. FHA reform is more ort- critical today than ever. The need for ome this legislation is immediate. . all -Many times exotic products such as ver. interestonly loans. negative amortizato tions are the only options available to des. working families to achieve homeagle ownership. This is because the FHA Lave program became virtually irrelevant keep for many home buyers. :age Not only can the bill before us today .on- provide a. viable alternative for famility lies seeking to purchase a home. but it opible can also help families facing uncerort- tainty about being able to keep their -s a current home. .tly. The bottom line is to make the FHA ner- program a viable mortgage option. we dif- must ensure that the programs prodin- ucts are available across the country PHA and theymeet the needs of borrowers. sing This includes not only eliminating the .R. geographic barriers to utilization of ain. the program in highcost areas. but .e of also facilitating the purchase of entrythe level homes. including condos and manufactured housing. These forms of housing are an affordable option for entrylevel home buyn. I ers. and they should be included under nan this program if we truly want to help his families climb the first rung on the acy ladder of homeownership. joy In addition to reforming. what can be ing purchased under the program. we must r fi- also -improve the competitiveness of the the FHA product among the mortgage options available. .In other words. we ites must address the iproblems in FHA proali- grams that cause it not to be utilized when it is an available mortgage prodLia. uct for the potential home buyer. .up- The answer is that the program in end flexibility and burdensome processes :ing have left many in the industry hesitant .tee or. in the case of mortgage brokers. unnk- able to offer FHA products. heir The legislation before us today inime cludes a number of reforms to make the FHA program relevant in todays Re- marketplace. For example. todays ting mortgage brokers originate the majorket- ity of mortgage loans and. therefore. ket- provide HUD with the most available and and efficient distribution channel to Jol- bring the FHA loan products to the )ple marketplace. erm While mortgage brokers originate the majority of loans. many are not able to s in offer FHA products because of the costHA prohibitive and timeconsuming financial audit and net worth requirements. This effectively leaves subprime loan products as the only option for many borrowers who would otherwise qualify for an FHA. Now. let me say the subprime market is extremely beneficial and it needs to be relevant. But today you have many predators in that marketplace that are making loans to people that they know they cannot repay. The bill before us today includes language to replace FHAs net worth and audit requirement with a surety bond to allow more mortgage brokers to offer FRA products. This will ensure that the home buyers are given the option of a FHA product when they seek the services of a mortgage broker. .I would like to say a word about the affordable housing fund included in this bill. While I opposed a similar fund when it was attached to the GSE reform bill. I want my colleagues to know that I support this fund because an amendment I offered at the markup was accepted by Chairman FRANK to essentially say. and these are arguments that have been made against this. that the HUD must ensure that FHA insurance premiums are. one. as low as possible. two. that the insurance fund is solvent. and. three. that any FHA needs are met before excess dollars are sent to the housing fund. Virtually it says that FHA has the dollars. they will use the dollars. and when its not needed. then those. dollars will be forwarded to the fund. 0l 1230 After that I firmly believe that the FHA funds should be dedicated to housing. We do this for the highway fund when we charge a gas tax. Those taxes are dedicated to repairing our roads and highways in this country. We should do this with the FHA too. The FHA money we are talking about is money that currently is going to the treasury. Now more than ever Congress must pass FHA legislation so that we can remove the impediments to the utilization of the FHA and ensure that it once again helps working families across the country so that they have an opportunity to achieve and maintain homeownership. This is an important reform that will help many families avoid foreclosures. Most of the people. and I would say. all the organizations in the industry who are looking to help people who are in trouble today support this bill. They also support the GSE reform bill that we put forward because it does one thing: It provides longterm stability and liquidity to the marketplace. The goal of this bill is to ease the burdensome problems people are facing today. They are looking at losing their homes. We are saying lets provide longterm liquidity and help them maintain their homes.