Update: FHA Reform Bill Passes The Senate

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The Senate has just passed legislation that would open the door for FHA to become more competitive in the marketplace! The FHA Modernization bill, which now heads back to the House for “reconciliation” before heading to the White House, had been
stalled in the Senate for weeks.

Details still to be worked out include the increasing of loan limits, term (up to 40 years), risk-based MIP pricing, lowering the down payment requirements and a few other details, but is expected to happen quickly. This is good news for the industry, consumers and FHA, as we battle with increasing pressure from the sub-prime fallout.

I expect the bill will be reconciled fairly quickly, and signed quickly by the President as well, however we may face a delay while the lenders figure out what to do with it. FHASecure has had the same problems as many lenders took months to put the program into effect and some haven’t yet.

Here is a link to statement just put out by Barney Frank:

http://www.house.gov/apps/list/press/financialsvcs_dem/press121407.shtml

Either way, this can really help a lot of borrowers.