Mortgage Crisis Update: Senate Passes Major FHA Reform Bill
Dec 17, 2007
Last Friday, the Senate passed an "FHA Modernization" bill in a landslide 93 to 1 vote. If the president signs it in, it will increase the loan amounts that FHA can insure, and will cut down the minimum 3% down payment to 1.5%. It will also require more counseling to those getting FHA loans.
In my opinion, if the bill is signed in, it will apply necessary pressure to conventional lenders to introduce competing products. This would mean a much needed loosening of lending standards.
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