The so-called Expanding American Homeownership Act of 2007, otherwise known as H.R. 1852, passed the House of Representatives today in a 348-72 vote -- a landslide approval for FHA reform. Lawmakers also approved by voice vote an amendment offered by Reps. Barney Frank (D-MA), Gary Miller (R-CA) and Dennis Cardoza (D-CA) that would hike the FHA lending limit to $730,000 in high-cost metropolitan markets. The Bush administration had originally proposed increasing the FHA limit from $362,790 to the $417,000 conforming limit. National Mortgage News covers the administration's reaction to the amendment:
[FHA] Commissioner [Brian] Montgomery noted that the administration strongly opposes such a loan limit hike but said he expects the Senate bill to be more compatible with the administration's position. "We look forward to seeing what the Senate does, and we will try to work out those differences in conference committee," Mr. Montgomery told reporters.
The Senate has yet to take up its version of the bill. The NAHB and HUD Secretary Alphonso Jackson both praised the bill, with Jackson saying that the reform bill will "serve as a starting point" in particular for helping troubled subprime borrowers. (The NAHB's press release is here; HUD's press release is here). For those interested, the full text of the original bill is available here. This bill is likely to embolden many legislators to introduce or re-introduce numerous mortgage-related bills, the majority of which will look to reign in what has been interpreted by legislators as misconduct in the mortgage marketplace and the resulting plight of hapless borrowers. (Think of it as Capitol Hill's version of "piling on.") As an example, Stephanie Tubbs Jones (D-OH) said late today that she will reintroduce the Predatory Lending Practice Reduction Act (H.R. 2061), which calls for federal certification of mortgage brokers and agents and stiffer penalties for violation of federal law. Additionally, the bill would authorize funding for Community Development Corporations to provide training and counseling on the home buying process. There's much more to cover about the House FHA bill, particularly as it relates to the new proposed loan limits for the FHA -- but I'll save that for a separate editorial and instead give you an interesting discussion on FHA lending that took place among mortgage brokers during the midst of the housing boom.