Barney Frank: “The FHA has become a very successful program. It has taken up a lot of the slack that was created by problems elsewhere…”

“The FHA has become a very successful program. It has taken up a lot of the slack that was created by problems elsewhere in the housing area. It is being run very well. Secretary Donovan and Administrator Stevens deserve a great deal of credit. In a bipartisan way, the Committee on Financial Services has cooperated with them. We recently passed a bill, again a bipartisan bill, and the ranking member of the Housing Subcommittee, the gentlewoman from West Virginia (Mrs. Capito) is here, to enhance their authority to allow them to do a better job statutorily of guarding against abuse and fraud. The program's been sufficiently successful so that they have now run out of commitment authority. This bill would give them $5 billion more in commitment authority. But it is not an expenditure. Indeed, it is the opposite. This will save $94 million because we have structured the FHA today, and it's being run in a way that it makes a small profit for the Federal Government. If we do not pass this bill before the end of next week, us first and then the Senate, the FHA program will stop until October. That will deny people housing, and this is housing, homeownership and other forms of housing, that is responsibly done. It will be a further shot to the housing sector of the economy which is so important.”