Here’s a rundown on the changes of keenest interest to insurance advisors...
WASHINGTON, Feb. 14 -- Rep. Lynn A. Westmoreland, R-Ga. (3rd CD), issued the following news release:
The House Financial Services Committee held a hearing on Wednesday, February 13th, featuring a testimony from Federal Housing Administration (FHA) Commissioner Carole Galante. The hearing was titled, "Bailout, Bust, or Much Ado About Nothing?: A Look at the Federal Housing Administration's 2012 Actuarial Report" and discussed the impending financial insolvency of the FHA. This hearing served as an opportunity for Financial Services Committee members, including Congressman Westmoreland, to question Commissioner Galante on the role of the FHA in the mortgage insurance market, as well as her thoughts and predictions for the FHA's failing insurance fund. This was the second hearing in a series of hearings concerning the Federal Housing Authority, its role in the housing market and its impending financial problems.
A video of Congressman Westmoreland's opening statement can be found here.(http://www.youtube.com/watch?v=sp9JOtHaG38)
"I hope that we can get FHA back to the original intent that it was created to help the first time home buyer and people who might not otherwise be able to attain a mortgage. But at the same time I hope that we can also get the private sector, private mortgage insurance writers, into the game because if they ran their business like the FHA has ran their business, they would be out of business. And so while we're trying to make sure we keep a secondary market or availability for certain home buyers, I think we need to do more to turn it back over," stated Westmoreland.
Congressman Westmoreland also had the opportunity to question the witnesses about the losses and 2014 budget of the FHA, and if taxpayers can expect to foot the bill for a bailout. The government fund that insures the FHA's single-family mortgages was reported to be negative $16.3 billion, and the FHA is operating under its capital reserve requirement of maintaining at least 2% of its portfolio. In other words, the FHA is broke.
A video of Congressman Westmoreland's questions can be found here.(http://www.youtube.com/watch?v=N569Gb-jOCI)
Westmoreland: "Now let me ask you another question: supposedly in 2013, FHA, the president, had put in his budget a bailout of $688 million, but according to the DOJ settlement you were put in for $1 billion. So you're not projecting shortfall for 2014?"
Galante: "President's budget is not out for 2014 so I..."
Westmoreland: "Well it was due last week, wasn't it?"
Congressman Westmoreland also asked Commissioner Galante twice if she was familiar with the GAO's "high-risk" list and if she though the FHA should be on that list. Unfortunately, Congressman Westmoreland's time expired before Commissioner Galante could answer. The morning after the hearing, the GAO placed the FHA on the list of government programs that are identified as "high-risk due to their vulnerability to fraud, waste, abuse and mismanagement or the need for transformation."
For the GAO report, click here.(http://www.gao.gov/assets/660/652133.pdf)
For the video of the full House Financial Services Committee hearing, information on the hearing, or the opening statement of Commissioner Galante click here.(http://financialservices.house.gov/calendar/eventsingle.aspx?EventID=319161)
TNS-LE 130215-4205062 StaffFurigay