By a vote of 406-4, the House on Thursday approved the HR 5074, FHA Reform Act, a bill designed to strengthen the agency’s finances and provide a number of other reforms. One of its main provisions is one allowing the FHA to increase the annual premium it charges borrowers to a maximum of 1.55 percent of the mortgage balance.

What does it mean for us? This bill provides a tighter regulation of FHA-approved lenders. It gives the agency greater authority to investigate lenders with unusually high rates of default and withdraw certification.

The legislation is meant to address problems that emerged in the wake of the subprime mortgage crisis and provide enhanced protections for borrowers against questionable lending practices.

We’ll try to see what developments will occur in the following weeks after this bill is formally ratified.

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