CONGRESSWOMAN ELISE STEFANIK
On Wednesday, March 9, 2011, the House is scheduled consider H.Res. 150, the rule providing for consideration of H.R. 830, the FHA Refinance Program Termination Act. The rule would provide for one hour of debate equally divided and controlled by the chair and ranking minority member of the Committee on Financial Services. Additionally, the rule makes in order amendments printed in the Congressional Record by March 9, 2011 and provides for one motion to recommit with or without instructions. Complete consideration of H.R. 830 is expected on Thursday, March 10, 2011. The bill was introduced by Rep. Robert Dold (R-IL) on February 28, 2011, and referred to the Committee on Financial Services. On March 3, 2011, a mark-up was held and the bill was reported by a recorded vote of 33-22.
The legislation would rescind and permanently cancel all unexpended balances made available under the Emergency Economic Stabilization Act (aka “TARP”) that have been allocated for the FHA Refinance Program.
This legislation would void the letter by the Secretary of Housing and Urban Development outlining the program and would prohibit the Secretary from pursuing any substantially similar initiative. The legislation would direct that any amounts made available and expended prior to the date of enactment of this Act to continue to be governed by any laws, regulations, orders, or notices as already in effect.
The legislation would terminate the FHA Refinance Program and restrict the Secretary of Housing and Urban Development from newly insuring any mortgage under the program. The legislation would also direct the HUD Secretary to conduct a study to determine the extent of use of the FHA Refinance Program by members of the Armed Forces, Veterans, and Gold Star recipients.
In March 2010, the Administration announced the creation of the FHA Refinance Program to refinance underwater loans into the FHA. The program is funded with $8 billion in TARP funds. According to Treasury’s TARP Progress Report, only $50 million of this $8 billion had been disbursed as of February 3. The Administration originally estimated this program would help between 500,000 and 1.5 million homeowners. However, only 44 loans have been refinanced as of mid-February and only 245 applicants have been submitted, according to FHA Commissioner David Stevens. Without action by Congress, the FHA Refinance Program will continue until December 31, 2012.
The Congressional Budget Office (CBO) estimates that the legislation would decrease federal budget deficits by $175 million over the FY2011-2021 period. The legislation would also prevent the Treasury Department from drawing on an $8 billion line of credit established with Citigroup, purchased with TARP funding committed to the program under the Administration’s Making Home Affordable initiative.