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Galante’s Nomination to Head FHA Sent to Full Senate

NationalMortgageNews reports Republican Senators want the Obama administration to more forcefully strengthen the Federal Housing Administration (FHA) before confirming Carol Galante to head the agency. They also seek a plan for dealing with GSEs (government -sponsored enterprises) Fannie Mae and Freddie Mac. Sen. Jim Demint, (R-SC), leveling charges at Ms. Galante of being short-sighted at a Senate Banking Committee hearing on her nomination, says, “We need people with a sense of urgency about the need to turn things around and reduce our debt and avoid future bailouts.” Sen. Bob Corker, (R-Tenn.), says Galante is open to increases on insurance premiums, but current losses are coming from seasoned loans. The FHA does not think hiking insurance premiums on new, profitable loans is a good way to prevent the possibility of a bailout of the agency. On a $1.1 trillion portfolio of insured single-family loans, the latest FHA audit shows it has a 0.24 percent capital ratio. Sen. Richard Shelby, (R-Ala.), the ranking Republican on the Banking Committee, noting the Federal Housing Finance Agency (FHFA) is short of examiners to properly oversee the GSEs, says, “The longer we wait to reform our housing finance system, the larger these problems will grow and the solutions will become more expensive for the taxpayer.” Galante has been acting head of FHA since July, 2011. The Committee voted on party lines to send her confirmation to the full Senate.

(Graphic credit: FHA)

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