Washington Post (07/09/08) P. D2; ElBoghdady, Dina
The mortgage bill that would give the Federal Housing Administration a greater role in assisting struggling borrowers has come under criticism from new HUD Secretary Steve Preston because taxpayers could be hit with "preventable and foreseeable losses." In a conference call with reporters, Preston suggested the FHA would need to have certain standards in place if it is to take on the riskier loans of borrowers who have been forgiven a portion of their debt and have traded in mortgages with rising payments for more affordable FHA loans. Preston added that the final legislation should include initiatives favored by the Bush administration, such as allowing the FHA to charge borrowers insurance premiums based on credit risk. The House version of the bill does not address risk-based pricing, but the pending Senate version would prohibit such a move.
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