< Back to Previous Page Clinton Reintroduces the 21st Century Housing Act Legislation would Modernize the Federal Housing Administration and Provide a Strong Alternative to Subprime and Risky Mortgages Washington, DC - Amid continuing deterioration in the subprime mortgage industry, Senator Hillary Rodham Clinton reintroduced legislation to provide more homebuyers with a safer and more effective alternative to subprime mortgages. The 21st Century Housing Act will modernize the Federal Housing Administration and allow more homebuyers to take advantage of the FHA mortgage insurance program. "With the meltdown in the subprime housing market, it is clear that there needs to be a real alternative for more working families who want to achieve the dream of home ownership without having to jeopardize their financial futures with a risky mortgage product," said Senator Clinton. "Modernizing the FHA will be an effective way of providing that alternative and I will press in the Senate to take this long overdue step for our families," said Senator Clinton. The FHA was created during the darkest days of the Great Depression to serve working and low-income families who were shut out of the conventional housing market and to stabilize local and regional housing markets in times of economic disruption. After more than 70 years, 34 million families have realized the dream of homeownership through FHA. Today, FHA remains an industry leader in serving minority, first-time, and low-income homebuyers and continues to help people who do not qualify for prime mortgages to avoid risky and in some cases predatory mortgage products. For example, the rate of minority lending through FHA has grown to more than one in three mortgages backed by the FHA. However the FHA has been hampered by a lack of investment in personnel and technology infrastructure, and structural inefficiencies that have made it increasingly uncompetitive in many housing markets. Senator Clinton's bill would modernize the FHA and expand access to more homebuyers by: Allowing the FHA to make investments in both personnel and its information technology infrastructure to help meet the market demand for affordable mortgage products and work more efficiently with mortgage lenders and borrowers. Increasing the FHA's loan limits for housing in high cost areas which will help create more home buying opportunities in high cost-of-living states like New York so that working families don't get priced out of their own neighborhoods. Allowing the FHA to develop responsible, alternative mortgage products such as reduced down payments and longer term mortgages to meet the demand of lower and moderate income families. "This legislation will strengthen FHA and make it a viable alternative to some of the riskier products that have been marketed to homebuyers," said Pat Vredevoogd Combs, President of the National Association of REALTORS In a letter to Senator Clinton, John M. Robbins, Chairman of the Mortgage Bankers Association of America said, "We believe your bill will make the changes necessary to ensure that FHA continues its good work in partnership with the mortgage lending community to achieve our joint goal of providing affordable housing and financing." Since FHA works as a partner with the private market providing insurance for mortgages offered by conventional financial institutions, it is self sustaining through the income from mortgage insurance premiums paid by FHA borrowers. Moreover, with FHA backing, a homebuyer faces much lower monthly payments than they would face with a subprime mortgage. The FHA program costs nothing to the taxpayers as it returns money to the Treasury each year and has been remarkably successful in helping families buy a home. Senator Clinton's bill will update the FHA program to reflect the economic realities in the housing market and in high cost of living states and bring the program up to date for today's needs. In addition to modernizing the FHA, Senator Clinton has called for a series of steps to help address the crisis facing subprime mortgage holders. Senator Clinton outlined a plan to break down barriers to owning a home and build up protections against unfair and unscrupulous lending practices. Senator Clinton's plan will provide more borrowing options for lower income, minority and first-time homebuyers before they sign on the dotted line; more information and safeguards against abuses when signing a mortgage; and smart reforms to reduce foreclosures. Contact New York real estate lawyers from the law firm of Weinstein, Chase, Messinger and Peters, P.C. ,