House Financial Services Committee Chairman Jeb Hensarling, R-TX, last week pushed through committee his bill to replace Fannie Mae and Freddie Mac with a new securitization “utility” without any government backing, but opponents of the bill warn that the measure will have a much tougher time getting votes on the House floor. The Protecting American Taxpayers and Homeowners Act, H.R. 2767, was approved by a 30-27 margin with all the committee’s Democrats and even two Republicans voting against it. Before last week’s 10-hour bill markup, House Democrats released their principles for housing finance reform. In addition to preserving the 30-year fixed-rate mortgage, Dems aim to establish a system with an explicit government guaranty paid for by the private sector and maintain regulations that the House GOP wants to eliminate.

A pair of newly filed bills by a lone Senate Democrat would see the Home Affordable Refinance Program further expanded as a means to provide underwater homeowners with new refi options. The Rebuilding American Homeownership Act, S. 1375, would modify HARP to allow loans “that lack a government guaranty” to be refinanced through HARP. The bill would also direct Fannie Mae and Freddie Mac to price for the risk that the GSEs would be assuming, so that the program has no net costs, as well as establish an automatic sunset for the program after 24 or 36 months.

Several provisions in FHA solvency legislation are emerging as potential hot-button issues for lenders, according to legal experts. There is growing industry concern over indemnification provisions, which appear to be more stringent in the Senate’s FHA Solvency Act of 2013 than in H.R. 2767, Protecting American Taxpayers and Homeowners Act (PATH Act), which the House Financial Services Committee passed this week. Under Title II (FHA reform) of the PATH Act, a lender may be required to indemnify the FHA if the agency determines that ...

The House Financial Services Committee this week reported out a legislative package of housing finance system reforms, including measures designed to reduce FHA’s role in the mortgage marketplace, strengthen lender oversight and avoid a potential taxpayer bailout. The bill, Protecting American Taxpayers and Homeowners Act (H.R. 2767), passed by a vote of 30 to 27 despite mixed responses from industry experts, academics, financial trade associations and consumer advocates. Critics called for changes. Offered by Rep. Jeb Hensarling, R-TX, chairman of the Financial Services Committee, the bill proposes ...

FHA officials, industry groups and consumer advocates appear to be leaning more towards a Senate FHA reform bill that is moderate and far less ambitious than legislation approved by the House Financial Services Committee this week. Introduced by Senate Banking Committee Chairman Tim Johnson, D-SD, and Ranking Minority Member Mike Crapo, R-ID, the FHA Solvency Act of 2013 “focuses on the right issues, not like the House bill, which tries to dramatically alter the program and affect borrower eligibility,” said an industry observer. Testifying as the sole witness at a Senate Banking Committee hearing on FHA solvency this week, FHA Commissioner Carol Galante said ...

A former FHA commissioner said he supports a proposal in the Protecting American Taxpayers and Homeowners Act (PATH Act) to spin off the FHA from the Department of Housing and Urban Development as an independent government-owned corporation. Brian Montgomery, who was assistant secretary for housing and head of the FHA during the Bush administration, said the separation, if enacted, would transfer authority, resources and personnel from HUD to the FHA to manage the insurance fund. “This is something I have advocated both during and after my more than four-year tenure as FHA commissioner,” said Montgomery, who ...

The FHA is trailing Fannie Mae, Freddie Mac and the Department of Veterans Affairs in the disposition of real estate-owned properties, according to a new study from the Government Accountability Office. The study found that FHA’s net proceeds from REO sales from January 2007 through June 2012 were about 4 to 6 percentage points lower than Fannie’s and Freddie’s returns. The differences in combined returns between FHA and the government-sponsored enterprises persisted at an estimated 2 to 5 percent even after controlling for differences in value, location, market conditions and other relevant factors. In addition, the FHA took about ...

Industry groups are lauding a House Republican’s move last week to re-file a legislative countermeasure against municipalities seeking to use eminent-domain powers to acquire performing but underwater mortgage loans as a warning against localities still entertaining such a course of action. The Defending American Taxpayers from Abusive Government Takings Act, H.R. 2733, by Rep. John Campbell, R-CA, would prevent the “reckless” seizure of distressed home loans by local governments, a move that’s both legally questionable and that represents “a complete abrogation of private property rights.” “The federal government and the American taxpayer would be forced...

The House Financial Services Committee this week approved legislation that would dissolve the government-sponsored enterprises and leave the private market to pick up the slack, with all the panel’s Democrats and two Republicans voting against it. Obama administration officials suggest that bipartisan support will be necessary to enact GSE reform and significantly increase non-agency involvement in housing finance. The Protecting American Taxpayers and Homeowners Act of 2013, H.R. 2767, was sponsored by ...

Voting largely along party lines, the Republican-held Housing Financial Services Committee this week approved H.R. 2767, the Protecting American Taxpayers and Homeowners Act, by a 30-27 margin, advancing the measure to the House floor for consideration a mere two weeks after it was filed. The focal point of the committee’s debate was the conspicuous absence of a government mortgage guaranty to replace the backing provided for Fannie Mae and Freddie Mac mortgage-backed securities over the years. Democrats such as Massachusetts Rep. Stephen Lynch painted the GOP measure as an “ideologically extreme and dangerous bill” that would destroy the 30-year fixed-rate mortgage if signed into law as is. The bill by Committee Chairman Jeb Hensarling, R-TX, would end conservatorship of the GSEs within five years and put them into receivership, eliminate their government charter and liquidate any remaining assets...