Senate Panel Passes Flood Extension

Mortgage & Real Estate

The Senate Banking Committee last this week approved a bi-partisan bill to reform the National Flood Insurance Program, extending it out for five more years.  

Like what you see? Click here to sign up for a National Mortgage News free trial and daily newsletter to get the latest feature stories, news headlines, data, and in-depth analysis on the issues impacting the mortgage industry.

The legislation phases out subsidized insurance rates for second and vacation homes over four years.

It requires lenders to escrow flood insurance payments for all properties that are located in flood zones where purchasing flood insurance is mandatory.

In cases where properties are newly mapped into a 100-year flood zone, insurance rates would be phased in over four years.

Chairman Tim Johnson, D-S.D., said the bill, “puts the program on a more fiscally sound path and phases in premium increases.”

Committee leaders continue to work on an amendment by Rep. Roger Wicker, R-Miss., to ensure the federal flood insurance program is not forced to pay for wind damage that should be covered by private insurers.  “We have an agreement in principal and we will work this out,” Sen. Richard Shelby, R-Ala.

The House of Representatives passed a five-year NFIP reform bill in July by a 406-22 vote.  

Separately, the Banking Committee approved the President’s nominations of Martin Gruenberg to be the new FDIC chairman, and Thomas Curry to head the Comptroller of the Currency.

However, Senators Shelby and Bob Corker, R-Tenn., expressed concerns about Curry’s “independence” from political and White House pressure, which could hold up his confirmation by the full Senate.

Currently, Gruenberg and Curry sit on the Federal Deposit Insurance Corp. board of directors.  Gruenberg is the acting FDIC chairman and Curry is an FDIC director. 

Daily Briefing | Friday, September 9, 2011

  • FHFA May Raise HARP LTV Threshold

    The Federal Housing Finance Agency is looking at raising the 125% LTV cap on refinancing underwater borrowers while considering other enhancements to the Home Affordable Refinancing Program, according to agency acting director Edward DeMarco.

  • MGIC Wants to Shed Units

    MGIC is in discussions to sell its eMagic unit as well as its Myers Internet business, a company spokeswoman confirmed. The pair contributes minimal revenue to the company and it has made a strategic business decision to try and divest them, she said.

  • Morgan Taking Bids on Saxon

    Morgan Stanley Co. this week took bids on its residential servicing division, Saxon Mortgage, Ft. Worth, Texas, which holds $28 billion of contracts on its books, according to MA officials.

  • Ten-Year Yield Drops Back Near Tuesday’s Low

    Further European concerns by around noon on Friday had brought the rate-indicative 10-year Treasury yield back down near record lows seen earlier in the week and had had a somewhat mixed effect on industry stocks, some of which fared relatively well considering the Dow had dropped more than 300 points.

  • White House Identifies Needed Fixes to HARP

    Obama Administration officials have identified several constraints on the HARP program — including mortgage buyback risk — that are keeping Fannie Mae and Freddie Mac seller/servicers from refinancing underwater borrowers.

  • Darker Economic Outlook Brightens Mortgage Revenues

    The size of the economic lift from any program to streamline refinancings is debatable, but the plunge in interest rates is already fattening mortgage production revenues.

  • Obama Refi Plan Details Coming Later This Month

    Although President Obama Thursday night made a slight reference to a government-backed refi plan for troubled mortgagors, the effort appears to be temporarily stalled over concerns about what effect it would have on both MBS investors and the megabanks, according to advisors and trade group sources who claim to have knowledge of the program.

  • PHH Servicing Production Cheaper Than Buying

    PHH Corp., Mt Laurel, N.J. is the only independent mortgage loan servicer that can internally generate new unpaid principal balances for its platform and thus its loan production unit can generate MSRs at a discount compared to the cost to purchase them, an analyst for Sterne Agee said.

  • Freddie Won’t Fire Sale Foreclosed Homes

    Freddie Mac said it will not dramatically discount its backlog of foreclosed homes, arguing that such steep price cuts could destroy the housing market.

  • Warren Keeps Up Pressure in CFPB Fight

    Elizabeth Warren has headed back to Massachusetts, but she remains engaged in the partisan fight in Washington over the Consumer Financial Protection Bureau.

  • Title Insurers Look to Cost Cutting

    The presentations of three national title insurance underwriters at the Keefe Bruyette Woods insurance conference held on Wednesday concentrated on the importance of focusing on profitability in the current real estate market, analyst notes said.

Leave a Reply