Wednesday, September 17, 2008

House panel OKs mortgage lending bill

by J. Craig Anderson - Sept. 17, 2008 12:00 AM
The Arizona Republic

A bill that would preserve no-down-payment mortgage lending flew over its first legislative hurdle Tuesday.

U.S. House Resolution 6694, also known as the FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008, passed the House Financial Services Committee and was expected to move to the House floor for a full vote in the coming days.

Seller-funded down-payment assistance allows home builders and other sellers to pay for a homebuyer's down payment on a Federal Housing Administration loan by funneling the money through a non-profit organization.

Valley housing experts say the practice is being used for at least 70 percent of all new-home loans, and they said the ban would further slow the housing market's recovery.

A federal housing bill passed in July includes a provision to ban seller-funded assistance, which the FHA has called a "shell game" that artificially inflates home prices and carries a higher default rate.

 

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