Congress Returns, Vote for Foreclosure Prevention Act to Happen This Week
Tuesday, July 08, 2008
by Michael Peron
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After taking a short break for the July 4th holiday, Congress is back at it again. Among the bills for discussion this week: H.R. 3221, the Foreclosure Prevention Act of 2008.
With an 84 to 12 vote on April 10, the bill passed the Senate despite opposition from various industry and consumer advocacy groups, as well as the White House, which claimed earlier that week that the bill favors the use of taxpayer money to bail out investors and lenders over solutions that would support additional aid for distressed borrowers.
As previously reported on DSNews.com, the current measures included in the current bill:
- A proposal to modernize the Federal Housing Administration (FHA), allowing the loan limit to be increased to 110 percent from 95 percent of area median home price with a cap of 132 percent of the government-sponsored enterprise limit ($550,000). According to the plan, down payments of 3.5 percent are a provision on any FHA loan and counseling is offered to ensure the loan's viability over its lifespan.
- Providing $4 billion in funding to communities devastated by foreclosure to stabilize the neighborhoods.
- Offering preforeclosure counseling for families. The proposal will aid an additional $250,000 families.
- Developing better practices when it comes to mortgage loan disclosure. The guidelines would require that lenders let borrowers know how high the loan payments will go during the duration of the loan's life cycle. The information will be provided within the seven days before closing so borrowers have time to reenter the market for better loan terms if need be.
- There is also a provision that makes lenders wait a longer period of time—three to nine months—before foreclosing on a returning veteran's home. It also requires the Department of Defense to create more homeownership counseling programs for veterans, as well as guarantees an increase the VA loan guarantee amount.
- A property tax reduction for American homeowners—$500 for single filers and $1,000 for joint filers—for the 28.3 million nonitemizers who pay property taxes.
- The utilization of mortgage revenue bonds to help with the refinancing of subprime mortgages or with aid to help first-time home buyers.
- The bill does not include the much-discussed provision that would allow bankruptcy judges to modify loan terms from the bench.
According to a statistic from washingtonwatch.com, passage of the housing bill could cost the average U.S. family a little over $190.Jacqueline Gilbert
With an 84 to 12 vote on April 10, the bill passed the Senate despite opposition from various industry and consumer advocacy groups, as well as the White House, which claimed earlier that week that the bill favors the use of taxpayer money to bail out investors and lenders over solutions that would support additional aid for distressed borrowers.
As previously reported on DSNews.com, the current measures included in the current bill:
- A proposal to modernize the Federal Housing Administration (FHA), allowing the loan limit to be increased to 110 percent from 95 percent of area median home price with a cap of 132 percent of the government-sponsored enterprise limit ($550,000). According to the plan, down payments of 3.5 percent are a provision on any FHA loan and counseling is offered to ensure the loan's viability over its lifespan.
- Providing $4 billion in funding to communities devastated by foreclosure to stabilize the neighborhoods.
- Offering preforeclosure counseling for families. The proposal will aid an additional $250,000 families.
- Developing better practices when it comes to mortgage loan disclosure. The guidelines would require that lenders let borrowers know how high the loan payments will go during the duration of the loan's life cycle. The information will be provided within the seven days before closing so borrowers have time to reenter the market for better loan terms if need be.
- There is also a provision that makes lenders wait a longer period of time—three to nine months—before foreclosing on a returning veteran's home. It also requires the Department of Defense to create more homeownership counseling programs for veterans, as well as guarantees an increase the VA loan guarantee amount.
- A property tax reduction for American homeowners—$500 for single filers and $1,000 for joint filers—for the 28.3 million nonitemizers who pay property taxes.
- The utilization of mortgage revenue bonds to help with the refinancing of subprime mortgages or with aid to help first-time home buyers.
- The bill does not include the much-discussed provision that would allow bankruptcy judges to modify loan terms from the bench.
According to a statistic from washingtonwatch.com, passage of the housing bill could cost the average U.S. family a little over $190.Jacqueline Gilbert
