Congresswomen Call for Expansion of Federal Housing Administration Program to Assist Homeowners

Press Release

Congresswomen Call for Expansion of Federal Housing Administration Program to Assist Homeowners

Reps. Shelley Moore Capito (R-WV) and Judy Biggert (R-IL) today sent a letter to Federal Housing Administration (FHA) Commissioner Brian Montgomery encouraging swift action on a plan to aid struggling homeowners by expanding the FHASecure program.

"The housing crunch has had a ripple affect on our economy and demands a concerted effort to combat foreclosure and protect home values, while providing support for struggling families," said Capito. "The well-documented success of FHASecure presents an opportunity to provide a self-sustaining line of support for homeowners without shouldering taxpayers with undue risk or jeopardizing consumer access to credit."

Capito serves as the Ranking Member of the House Financial Services Subcommittee on Housing and Community Opportunity and Biggert serves as the Ranking Member of the Subcommittee on Financial Institutions and Consumer Credit.

"High foreclosure rates continue to damage our economy, degrade home values, and displace families," said Biggert. "FHASecure already has helped 130,000 qualified homeowners to refinance into much safer, more secure FHA loans. It's a common-sense way that we can give struggling borrowers an alternative to bad, subprime loans -- without resorting to an inappropriate taxpayer-funded bailout."

The FHA is the only Federal housing insurance program that provides mortgage alternatives for many low- and middle-income Americans, including first-time homebuyers and those currently looking to refinance.

Under FHASecure, homeowners with a non-FHA adjustable rate mortgage (ARM) can refinance into an FHA-insured mortgage with lower monthly payments. FHASecure is available for those facing the prospect of a higher interest rate under a loan reset, and those who may be delinquent in their payments as a result of a loan reset.

By reducing the overall number of mortgage defaults, an expanded FHASecure program can help curb foreclosures, maintain home values and bring stability to local housing markets.

The full text of the letter can be found below:

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April 8, 2008

The Honorable Brian Montgomery
Federal Housing Administration
451 7th Street, S.W.
Washington, D.C. 20410

Dear Commissioner Montgomery:

We are pleased to learn of recent reports that your agency may have the ability to assist, by the end of 2008, up to 200,000 additional qualified homeowners facing foreclosure to refinance their bad, subprime loans into to safe, FHA-insured products by expanding the FHASecure program. While Congress puts the finishing touches on FHA modernization legislation, we urge you to finalize details of your proposal and administratively expand FHASecure as soon as possible.

As you know, foreclosures are on the rise and the more qualified homeowners that we can help keep in their homes the better. We think it's wise to help troubled homeowners refinance through FHA. It's a way the government can help without spending taxpayer dollars on an inappropriate bailout.

We appreciate your and the Administration's efforts to date, and we look forward to seeing your new initiative implemented as soon as possible. Please feel free to contact us if we can provide any Congressional assistance to achieve this end.

Sincerely,

Judy Biggert (R-IL), Ranking Member, House Financial Services Subcommittee on Financial Institutions and Consumer Credit

Shelley Moore Capito (R-WV), Ranking Member, House Financial Services Subcommittee on Housing and Community Opportunity

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