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

Madam Chairman. Im rising asking for strong support of this amendment. so its not really in opposition to the amendment. This bill. and this amendihent. particularly. is to encourage the FHA program and products and make sure theyre available across this country to help working families to achieve and maintain homeownership through the FHA program. The bill we are considering here today reforms the FHA singlefamily mortgage insurance program so that we can reach working families it was created to serve. I dont think there is. any question that the FHA program. as currently structured. has not kept pace. Today. FHA is no longer a useful product to pro"spective home buyers. The problem is that statutory limitations preclude the FHA from adopting a rapidly changing marketplace that we experience today. As the private sector mortgage markets become more efficient. the FHA programs inflexible rules and requirements. left it virtually irrelevant as a financing option. Under the current limitations. FHA products are not available for home buyers in highcost areas of the country because the maximum loan limits are so much lower than the median home prices in that area. We did something very similar to this when we did the GSE in the highcost areas. And the only people arguing against raising this conforming loan limit to highcost areas were those whose home median prices fell far lower than the median amount they were able to loan on. If your median home area is 200.000 and it isnt 435. you dont care. But in California and other areas. it is quite the opposite. Now Californias drop in FHA volumes have been nothing short of stunning. In 2000. FHA insured 109.074 mortgages in California. but last year it only insured 5.137. In "my district. FHA insured 7.000 mortgages in 2000 and only 80 mortgages in 2005. These figures represent a 99 percent drop in what FHA is able to loan in these highcost areas. That in and of itself states that there is a huge problem that this amendment is trying to cover and create the shortfall that currently exists in the program. Arguably. working families in highcost areas of the country are just the kind of underserved populations the FHA program was originally intended to serve. If we want to ensure that FHA is relevant for all those who need it. we must reforni the program so it is available to low- and moderateincome families across the country. even those in highcost areas. On August 31. the President announced his goal to help an estimated 240.000 families avoid foreclosures by enhancing the FHA program. Under the Presidents plan. FHA will allow families with strong credit histories who have been making timely mortgage payments before their loan reset. but are now in default. to qualify for refinancing. Unfortunately. without an increase in the loan limits.. this program will not help families in highcost areas. This amendment. supported by Mr. FRANK. Mr. CARDOZA and myself. .would make sure that families can refinance in the FHA products by raising the FHA singlefamily loan limits in each local area to the lower of 125 percent of the area median home price. or 175 percent of the national GSE conforming loan amendments. The amendment also gives HUD authority to . raise these loan limit amounts by up to $100.000 "if market conditions warrant."