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Chairman Hensarling on Administration Lowering FHA Mortgage Insurance Premiums

Washington, Jan 7 -

House Financial Services Committee Chairman Jeb Hensarling (R-TX) issued the following statement regarding reports that President Obama on Thursday will announce executive action to lower Federal Housing Administration (FHA) mortgage insurance premiums:

“Such an action by the President would be a grave mistake that will end up hurting hardworking taxpayers.  It was just two years ago that taxpayers had to bail out the FHA to the tune of $1.7 billion, and just two months ago an audit revealed that FHA is still in violation of federal law because it does not maintain sufficient capital reserves.  Lowering premiums now would only put the FHA further behind.  A fiscally sound FHA, with a clearly defined mission, ensures homeownership opportunities for creditworthy first-time homebuyers and low-income families.  Any effort to lower FHA premiums would be counterproductive to achieving these goals and would place the U.S. taxpayer at greater risk.
 
“The American people want an end to the destructive cycle of boom, bust and bailout that poor decisions in Washington produce.  If President Obama follows through on today’s pledge, he will be increasing the likelihood that taxpayers will have to foot the bill for yet another bailout.
 
“The Financial Services Committee is already planning to bring Secretary Castro before our members to question him about the poor financial condition of FHA, which President Obama is apparently about to make even worse.”