Posts Tagged ‘reform act’

Federal Housing Administration Bailout Mandated by Law

October 1st, 2013 Comments off

Following a story from yesterday, Sept. 30, regarding the need for a $1.7 billion bailout of the Federal Housing Administration (FHA) by Treasury, FHA Commissioner Carol Galante says the request for funds comes from an estimate of forecasted losses from Dec. 2012 that cannot be altered due to mandated accounting rules. She says the next report will document that the agency is in better shape than one year ago. But critics argue the FHA was too lax with bad lenders and borrowers with high default rates. Republican leaders want swift passage of the Protecting American Taxpayers and Homeowners (PATH) Act which will eliminate Fannie Mae and Freddie Mac and reform FHA’s accounting system. As nationalmortgagenews reports, earlier this year the White House had projected a shortfall of $943 million, but that number has grown due to the slowdown of mortgage applications recently. However, Galante says the main reason is due to accounting, MHProNews has learned. The Federal Credit Reform Act of 1990 requires the agency to cover all expected future losses for 30 years and maintain a 2% capital reserve. “No bank in America reserves for credit losses on a 30-year terms, instead banks get to adjust reserves based on economic conditions,” says David Stevens, president of Mortgage Bankers Association (MBA). “But this is very complicated, very unique accounting and technically they have to draw the funds even if they don’t need the money.”

(Image credit: Federal Housing Administration)

Testing, Testing…

December 14th, 2012 Comments off

HousingWire reports the Consumer Financial Protection Bureau (CFPB) wants banks to test run some of the mortgage disclosures for consumers required by the Dodd-Frank Wall Street Reform Act before forcing them to fully comply, an idea attractive to the market. This collaborative approach will inform consumers on making good decisions, and solicit industry input during the trial run for how best to deliver the new procedures and processes. MHProNews has learned these trial balloons with select institutions, called Project Catalyst, will also provide safe harbor during the test period for lenders. Says Rick Sharga of Carrington Mortgage Holdings, “Reaching out to practitioners to create in-market trial programs that benefit consumers and work better for financial institutions is a win/win.”

(Image credit: totalmortgage)

MHARR Lashes Out at HUD

April 17th, 2012 Comments off

A report from the Manufactured Housing Association for Regulatory Reform (MHARR) dated April 16, 2012 states HUD has returned to its authoritarian roots as it continues to disregard the Reform Act of 2000. MHARR cites its continuing discrimination especially against the smaller manufacturers, which ultimately raises the costs to the consumers and stifles growth of the industry. MHARR says the Manufactured Housing Consensus Committee (MHCC) is once again stacked in favor of larger manufacturers, much of its recommendations to HUD are ignored, and in-plant regulations are often enforced to favor the larger producers. MHARR notes HUD continues to dangle the so-called “conditional” fire sprinkler safety standard in the industry’s face like a threat; and several expenses dealing with regulation and monitoring have risen as production decreased. MHARR strongly suggests HUD makes manufactured housing a part of all government and private housing programs, and pull it from the “trailer park” image HUD has not tried to change.

(Image credit: MHARR)