NAFCU is still lobbying to have the Federal Housing Administration lengthen the amount of time consumers who strategically default on a mortgage loan have to wait to apply for another FHA-insured loan.
In a letter Monday to the leadership of the House Financial Services Committee, the association made the case that Fannie Mae, the organization which buys many mortgage loans, has imposed a waiting period of seven years before a strategically defaulted borrower could qualify for a new mortgage loan destined for the secondary market.
FHA, by contrast, has a waiting period of three years.
“In short, because of the discrepancy in lockout periods related to strategic default, FHA can be viewed as a safe haven for those who strategically defaulted on previous mortgages,” NAFCU wrote in its letter about a piece of FHA reform legislation. “This risk to the taxpayer, encouraged by FHA policies, is a critical part of the safety and soundness conversation that must be explored.”
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.