Melvin Watt: “I am a little confused by the chairman's position on this proposed amendment. The amendment says do not raise FHA…”

“I am a little confused by the chairman's position on this proposed amendment. The amendment says do not raise FHA premiums above what it would cost to actually insure. Now, when I first heard the chairman's argument, he said well, we are not making any profit on FHA premiums. Then, by the time I got to the floor I heard that if we did this, it was going to cost us $280 million. The CBO says that it would cost $5 million, which is what the gentleman from Massachusetts has found as an offset to make the budget back in balance. The problem is that if FHA premiums are raised beyond the actual cost of the insurance, people who are buying houses will pay that extra cost. It is that simple. No funny business, no fuzzy math. If the premium is higher than the actual cost of the insurance, that extra cost is going to be borne by homeowners or home buyers. In a market where people are trying to acquire homes, that could be the difference between somebody being able to afford a home and somebody not being able to afford a home. So, I think this is just simple, straightforward math here.”