57 Days: Dole Opposed Reforming the Federal Housing Administration

DAY 58

As usual, Elizabeth Dole has been saying one thing in North Carolina and doing another in DC on mortgage reform. Several months after pledging her support for modernizing the Federal Housing Administration (FHA) in North Carolina, Dole was back in Washington working for her special interest friends to make sure that housing reform measures didn’t go anywhere. And during the height of the subprime mortgage crisis, as hardworking North Carolinians faced the cold reality of record foreclosures, Dole was the only member of the Banking Committee to vote against FHA reform that would have helped countless Americans. Then again, she doesn’t have anything to worry about – she and Bob have owned their condo in the Watergate since the 1970s.

Dole Said She Supported Modernizing FHA. In a speech delivered in Greenville on August 20, 2007, U.S. Senator Elizabeth Dole said that “revitalizing and modernizing the Federal Housing Administration may be the best hope for keeping distressed borrowers in their homes. I have been working on modernizing FHA.” [U.S. Senator Elizabeth Dole Press Office, 8/20/07]

Dole Placed Hold On FHA Reform Legislation. In 2007, U.S. Senator Elizabeth Dole blocked FHA reform legislation that would begin pricing mortgages based on credit risk. According to the Washington Post, “Dole is an ally of the private mortgage insurance industry, which would have to compete with a revived FHA in the low-down-payment segment of the mortgage market.” [Washington Post, 11/24/07]

Dole “Ally of Private Mortgage Insurance Industry” Blocked Bill That Would Make Them Compete With Revived FHA. In November 2007, Dole placed a hold on the FHA reform bill because she objected to FHA’s plan to price mortgages based on credit risk. The Washington Post reported though that Dole, “an ally of the private mortgage insurance industry,” actually opposed the bill because the industry would have been forced to compete with a “revived FHA” in the low-down payment segment of the mortgage market. [Washington Post, 11/24/07; Baltimore Sun, 11/25/07]

Dole Was Only Senator On Banking Committee To Vote Against FHA Reform Bill. In September 2007, during the height of the subprime mortgage crisis, Dole voted against a bill to modernize the Federal Housing Administration. The bill that Dole opposed would have increased FHA loan limits for single families to the lower of either 100 percent of the median home price in an area, up from 95 percent, or $417,000. The measure also reduced down payment requirements to 1.5 percent, from 3 percent, and set the maximum loan amount in any individual case at 100 percent of a house's appraisal value. [CQ Committee Coverage, 9/19/07]

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