A provision in a House resolution passed Tuesday directs Obama Administration officials to provide support and facilitate increased warehouse credit capacity for qualified warehouse lenders and will now go to the Senate for consideration.
The bill notes while warehouse lenders account for as much as 40% of all residential mortgage loans in the US and nearly 55% of FHA loans, warehouse lending capacity available to the mortgage lending industry has declined by nearly 90% to the current level of approximately $20bn to $25bn.
The resolution, H.R. 3146, would expand Federal Housing Administration (FHA) personnel and training and requires the Department of Housing and Urban Development (HUD) continue to review FHA-insured loans that become 60 days delinquent in the first 90 days of origination to allow earlier intervention and sanctions against potentially underperforming lenders.
In addition, the resolution directs HUD to carry out “demonstration programs” to analyze loss mitigation strategies for FHA-insured loans.
A second resolution passed Tuesday amends the maximum mortgage principal amounts the HUD secretary can insure for elevator-type structures for rental, cooperative, rehabilitation and neighborhood conservation housing, among others.
The bill replaces the current specific dollar amount for per unit that insurable mortgage principal obligation may be increased with a 50% cap on increases of per unit insurable amounts. It also authorizes the HUD secretary to set a higher maximum for principal obligation of FHA-insured mortgages for projects of more than four units in extremely high-cost areas, like Alaska, Guam, Hawaii, and the Virgin Islands.