The United States Senate passed a landmark FHA modernization bill (S. 2338) that could help stabilize the housing finance crisis. Because there are significant differences between the recently passed Senate legislation and the bill passed earlier this year by the House of Representatives (H.R. 1852) a conference committee with members of the House and Senate will be appointed to reconcile the differences.

Senate action on legislative overhaul of the Federal Housing Administration, was delayed nearly a month because of a hold by Tom Coburn, R-Okla. Earlier this month REALTOR® members from key states participated in a "fly-in" to directly lobby Senators and Staff members to urge action on S. 2338. REALTOR® Members from Oklahoma lobbied Senator Coburn's office to impress upon him the importance of acting on FHA Modernization. the Oklahoma Association of REALTORS® also engaged in a state-wide Call For Action and submitted letters to the editors of key newspapers in the state. The South Carolina Association of REALTORS® launched a similar effort to lobby Senator Jim DeMint who also had a hold on the FHA bill.

In a message to REALTOR® members who participated in the Call For Action, 2008 NAR President Dick Gaylord praised the efforts of our state and local association partners," I want to recognize the extraordinary efforts of our state association partners in Oklahoma and South Carolina. Senators Tom Coburn (Oklahoma) and Jim DeMint (South Carolina) had been using Senate rules to block consideration of the FHA Modernization Bill. Our state and local association partners in Oklahoma and South Carolina impressed upon their Senators the need to consider and pass the FHA Modernization Bill as an essential component of a comprehensive real estate recovery program."

The Senate passed the measure, 93-1. FHA helps home buyers obtain safe and affordable mortgages by insuring the loans. The Senate bill would increase FHA loan limits; specifically, it would allow the FHA to insure loans of up to $417,000 in high-cost areas. The current limit is $362,000, far below amounts that many borrowers need. The legislation would reduce the minimum required down payment and permit homeowners who have fallen behind on their mortgage payments to refinance into FHA-backed loans. Additionally, the measure would increase penalties for fraud.

No timetable for the Conference Committee has been announced but NAR has submitted a letter to the House Committee on Financial Services and the Senate Committee on Banking, Housing and Urban Affairs urging a quick reconciliation of the differences in the legislation.

Source: National Association Of Realtors