Top Democrats on the House Committee on Financial Services reintroduced a bill designed to “strengthen FHA and to help ensure its long-term solvency.” House Committee on Financial Services Ranking Member Maxine Waters (D-CA) and Housing and Insurance Subcommittee Ranking Member Michael Capuano (D-MA) introduced H.R. 1145 on March 13. Identical legislation, H.R. 4264, passed the House during the last session of Congress by a vote of 402 to 7. That bill was introduced by Representative Judy Biggert (R-IL), then Ranking Member of the Housing Subcommittee. In a press release upon the bill’s introduction, Ranking Member Waters said, “Working with the Administration, we plan on drafting additional legislation to give FHA more tools to bolster its insurance fund. But this is an important first step, and should be considered immediately, given that it was supported by such an overwhelming, bipartisan majority in the last Congress. It is time to move beyond discussion of this issue and take action.” The committee has had three hearings on FHA issues so far this year, including one on March 13 on private sector and government-subsidized approaches to mortgage insurance (see Memo, 2/8 and 2/15). The bill would allow HUD to require indemnification from a mortgagee if the department determines that the mortgagee knew or should have known of a serious violation of HUD’s mortgage underwriting standards for FHA loans. The bill would also require a semiannual independent actuarial report on the FHA to Congress, instead of the current annual report provided. The bill would allow HUD to terminate the ability of a mortgagee to originate or underwrite FHA mortgages if HUD finds an excessive rate of early defaults or claims. Under the bill, the HUD Secretary would also have to submit to Congress, within 30 days of the bill’s enactment, an emergency capital plan for the restoration of the FHA’s fiscal solvency. The bill was referred to the House Committee on Financial Services. Click here to read Ranking Member Waters’ press release.