Foreclosure Prevention Act Passes Senate
Sunday, April 20, 2008
The 2008 Foreclosure Prevention Act (Senate Bill 2636) passed the U.S. Senate after Senators voted 84 to 12 Thursday in favor of the legislation.
The bill passed despite opposition from various industry and consumer advocacy groups, as well as the White House, which claimed earlier in the 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.
Senate Bill 2636 also passed without a controversial measure that would have allowed judges to adjust existing principals on mortgage loans to aid borrowers. The Mortgage Bankers Association (MBA) criticized this provision heavily, saying new home buyers would end up footing the bill if property values were subjected to the whims of judges adjusting loan terms from the bench.
The MBA gave the revised Act its stamp of approval on Thursday.
“The bill contains a number of critically important provisions to help stabilize the mortgage and real estate market,” Kieran Quinn, chairman of the Mortgage Bankers Association said. “We support many of those, including the modernization of FHA, the expansion of mortgage revenue bond programs and additional funding for housing and credit counselors to help those borrowers who are facing difficulties making their mortgage payments.”
Consumer and affordable housing advocacy agencies, like the Association of Community Organizations for Reform Now (ACORN), stand in direct opposition to the MBA when it comes to the issue of loan modifications from the bench. ACORN expressed its displeasure Thursday when the bill passed without the cram down loan provision.
“ACORN members are disappointed by the Senate’s vote last week to kill a provision that could help 600,000 families facing foreclosure save their homes,” the association said in a press statement. “The Durbin amendment, which was offered to the Foreclosure Prevention Act, would have allowed bankruptcy judges to modify the terms of the mortgages of primary residences to achieve an affordable monthly payment when mortgage servicers refuse or are unable to make such modifications. Bankruptcy judges already have this power for second homes, vacation homes, yachts, and other major purchases, and the Durbin amendment would close the loophole preventing modifications on primary residences.”
Click here for more information about what's included in the Foreclosure Prevention Act
The bill passed despite opposition from various industry and consumer advocacy groups, as well as the White House, which claimed earlier in the 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.
Senate Bill 2636 also passed without a controversial measure that would have allowed judges to adjust existing principals on mortgage loans to aid borrowers. The Mortgage Bankers Association (MBA) criticized this provision heavily, saying new home buyers would end up footing the bill if property values were subjected to the whims of judges adjusting loan terms from the bench.
The MBA gave the revised Act its stamp of approval on Thursday.
“The bill contains a number of critically important provisions to help stabilize the mortgage and real estate market,” Kieran Quinn, chairman of the Mortgage Bankers Association said. “We support many of those, including the modernization of FHA, the expansion of mortgage revenue bond programs and additional funding for housing and credit counselors to help those borrowers who are facing difficulties making their mortgage payments.”
Consumer and affordable housing advocacy agencies, like the Association of Community Organizations for Reform Now (ACORN), stand in direct opposition to the MBA when it comes to the issue of loan modifications from the bench. ACORN expressed its displeasure Thursday when the bill passed without the cram down loan provision.
“ACORN members are disappointed by the Senate’s vote last week to kill a provision that could help 600,000 families facing foreclosure save their homes,” the association said in a press statement. “The Durbin amendment, which was offered to the Foreclosure Prevention Act, would have allowed bankruptcy judges to modify the terms of the mortgages of primary residences to achieve an affordable monthly payment when mortgage servicers refuse or are unable to make such modifications. Bankruptcy judges already have this power for second homes, vacation homes, yachts, and other major purchases, and the Durbin amendment would close the loophole preventing modifications on primary residences.”
Click here for more information about what's included in the Foreclosure Prevention Act
