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As the Senate cuts debate short on the Dodd-Countrywide mortgage bailout, the voices of concern and opposition to the misguided plan are growing. The latest concerns come from HUD Secretary Steve Preston, who criticized the bill on a media conference call yesterday. As first reported by Housing Wire, Secretary Preston highlighted changes in the bill that would undermine the Federal Housing Administration (FHA):
"The bill currently moving through the Senate would place a moratorium on risk-based pricing. That would be a big mistake. FHA will have to increase premiums across the board on all borrowers or, alternatively, seek taxpayer funds in October to cover potential losses, or cut back on the program at the very time we are an island of hope for hundreds of thousands of Americans."
"Taxpayers should not have to absorb preventable, foreseeable losses. We are looking for the Congress to pass responsible legislation that will help FHA continue to provide stability for the housing market and provide government-backed mortgages for low-and-moderate income families."
The full speech is available at http://www.hud.gov/news/release.cfm?content=pr08-100.cfm