Mortgage Legislation Passes House
The U.S. House of Representatives approved sweeping legislation that would modernize the Federal Housing Administration, provide $300 billion in FHA guarantees for borrowers facing foreclosure and increase oversight of government-sponsored enterprises.
H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act, was approved by the House today, according to a congressional announcement.
The legislation combines a number of bills designed to provide relief to the ailing U.S. housing market.
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Foreclosure Drama
Politicians in three states have recently proposed or implemented foreclosure moratoriums ranging from one month to two years, while a Chicago-based group is recommending a plan that would turn foreclosed borrowers into renters then back in to borrowers. Meanwhile, a new report analyzed the impact of foreclosures on children.
N.Y. Assembly Approves 1-Year Moratorium
One of New York's state legislative bodies has declared a public emergency and passed a bill that would give judges the power to delay subprime foreclosures for up to one year. Another bill that passed requires mortgage brokers to have an agency relationship with loan prospects.
Foreclosure Fight Flourishes
Public and private institutions and organizations have been busy in the growing business of foreclosure prevention. A bill passed by the California state senate would allow local jurisdictions to impose a $1,000-per-day fine on financial institutions that don't maintain vacant properties if problems are not fixed within 14 days.
Committee Passes $300 Billion Bailout Bill
A bill passed yesterday by a congressional committee would provide up to $300 billion in loans for delinquent borrowers. Under the proposal, existing lenders would have to accept substantial write-downs, while the government would acquire an equity interest in the properties.
Builders Struggling With Credit
Residential home builders, who have seen the pool of new homebuyers diminish with the contraction in available credit, testified before Congress that they are now finding it more difficult to obtain or extend financing for new developments. The sector is looking to banking regulators and government-sponsored enterprises for help.
No End In Sight for Subprime Downgrades
Classes of subprime residential mortgage-backed securities continued to take a beating by Moody's Investors Service. Meanwhile, mortgage bankers called on lawmakers to avoid creating different ratings processes for mortgage-backed securities.
HUD Chief Nominated
The president has made his choice about who should replace outgoing Secretary Alphonso Jackson.
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Best, Worst Foreclosure Prevention States
A new report projects that out of every 33 U.S. homeowners, one will face foreclosure during the next two years. North Carolina was cited as one state aggressively tackling the problem, while California was noted as doing too little.
World Among Hardest Hit CA Lenders
A projection that Northern California foreclosures have hit their peak was contradicted by another report that also indicated three prominent California lenders are being hit the hardest. Pennsylvania' Secretary of Banking commended the U.S. House for its approval of mortgage reform bills.
