Introduction of the Housing Financial Literacy Act of 2014

Floor Speech

Mrs. BEATTY. Mr. Speaker, owning a home is the cornerstone of achieving the American Dream for many Americans. Homeownership is a source of pride and develops robust and stable communities. However, for many prospective first-time homeowners, the process of purchasing real estate may be confusing and daunting and may leave uninformed buyers victims of unaffordable or predatory loans.

I believe that we must support access to homeownership and the financial literacy necessary to become a successful first-time homeowner. That is why today I am introducing the Housing Financial Literacy Act of 2014 which would provide a discount on Federal Housing Administration, or FHA, upfront mortgage insurance premiums of 25 basis points to first-time homebuyers who complete a housing counseling program certified by the Department of Housing and Urban Development, or HUD. This bill would encourage first time homebuyers to take advantage of these critical counseling resources that can increase their financial literacy skills and capabilities.

Currently, HUD's Housing Counseling Assistance Program provides counseling to consumers on the entire spectrum of housing counseling needs: from finding and financing, to maintaining and owning a home. Studies have shown that homebuyers who receive pre-purchase housing counseling courses are nearly one-third less likely to fall behind on their mortgage, and that housing counseling can improve prospective borrowers' access to affordable, prudent mortgage loans. Consequently, an additional anticipated benefit is a reduction in delinquencies and defaults by better-informed first-time homebuyers that should serve to strengthen the FHA's Mutual Mortgage Insurance Fund.

Mr. Speaker, for many Americans, their home is the largest financial asset they will ever own. Ensuring that first-time buyers have the knowledge and tools necessary to be successful homeowners is an objective that we can all share. My thanks goes out to the bipartisan group of original cosponsors who recognized the importance of this legislation, including the Democratic and Republican Co-Chairs of the Financial Literacy Caucus.

I urge my colleagues to join in our efforts to increase financial literacy by cosponsoring the Housing Financial Literacy Act of 2014.

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