House Dems reintroduce measure to bolster housing finances

{mosads}The FHA is staring at potentially billions of dollars in losses; its insurance fund has taken a hit in the wake of the subprime mortgage crisis. Its troubled finances have been a hot topic on Capitol Hill, and Republicans have contended that the FHA had overstepped its boundaries in guaranteeing mortgages, and was crowding out private-sector investment.

Meanwhile Democrats have contended the FHA stepped up to the plate during the housing downturn to ensure the continued flow of affordable credit, and now needs help digging out from those depths.

Under this new bill, the FHA would have more powers in demanding indemnification for loans it guaranteed that turned out to be improperly underwritten.