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News Release
MODERNIZED FHA AN ANTIDOTE FOR PREDATORY LENDINGS
HUD Deputy Secretary addresses Mortgage Banker’s Association National Policy Conference
WASHINGTON - Housing and Urban Development Deputy Secretary Roy Bernardi today addressed the Mortgage Banker's Association National Policy Conference, "Advocacy in Action," and said a modernized Federal Housing Administration "could be an antidote for predatory lending and for subprime difficulties."
Featured as a speaker during the conference's second general session, the Deputy Secretary discussed HUD's efforts to eliminate predatory lenders from the housing industry.
"We must end predatory lending practices and continue to enforce the law. We must seek out, expose, and prosecute predatory lenders. There is no place for predatory lending in the housing industry or as an investment practice. Predatory lenders and mortgage fraud harm everyone in the home purchasing process. It is immoral, often illegal, and always reprehensible," said Bernardi.
As an improved alternative to subprime lending practices, Bernardi discussed modernizing the Federal Housing Administration (FHA). "Reforms must be made for the FHA to adapt to today's marketplace. We have modernized FHA as much as we can but need legislation to truly bring the FHA into the 21st Century. A new FHA could be an antidote for predatory lending and for subprime difficulties," stated Bernardi.
"Unfortunately, under today's restricted premium limits and maximum loan amounts, FHA simply cannot reach all the borrowers who need the 'safety-net' that FHA can provide. For millions of Americans, refinancing with FHA could be a sound move."
Bernardi concluded, "In the end, the subprime problem should give us more insight and greater wisdom. We must build our American housing enterprise on a more solid foundation. FHA reform and other reforms proposed by this administration can do that. But we must have the courage to act now. ...We must forge workable, long-term solutions that will benefit millions of Americans for generations."
Read the Deputy Secretary's full remarks.