House passes two foreclosure prevention billsMortgagePress.comU.S. House of Representatives, foreclosures,
The United States House of Representatives has passed two
housing forelcosure bills, the American Housing Rescue and
Foreclosure Prevention Act (HR 3221) and the Neighborhood
Stabilization Act (HR 5818).
HR 3221 is a combination of bills intended to ease the
foreclosure crisis. It passed the House by a vote of 266 to 154.
Key components of the legislation include:
Amendment 1: FHA Housing Stabilization and Homeownership
Retention Act (HR 5830)
• Provides mortgage refinancing assistance
• Expands the FHA program so many borrowers in danger of
foreclosure can refinance into lower-cost government -insured
mortgages. Only primary residences are eligible.
• To participate, lenders and mortgage investors must take
losses by reducing the loan principal. In exchange for an FHA
guarantee on the mortgage, borrowers must share any profit from the
resale of a refinanced home with the government.
• Contains higher refinancing fees that establish a new
FHA reserve to cover possible losses from defaults on these
government-backed mortgages.
• Provides $230 million for financial counseling to help
families stay in their homes.
FHA Modernization (HR 1852)
• Expands affordable mortgage loan opportunities for
families and for seniors through expanded access to reverse
mortgages through Federal Housing Administration reform
GSE Reform (HR 1427)
• Strengthens regulation of Fannie Mae and Freddie Mac, and
the Federal Home Loan Bank system.
• Raises the GSE loan limits for single family homes in
high-cost areas.
• Expands liquidity in the mortgage markets by buying
loans already made, freeing up money for new mortgages and
refinances.
• Creates a new Fund to boost the nations stock of
affordable rental housing.
Encouraging Mortgage Modifications/Castle Bill (HR
5579)
• Provides mortgage servicers with clarity and certainty for
loan modification, and protection from investor lawsuits for
specified loan modifications.
Increasing the VA Home Loan Limit
• Increases VA Home Loan limit, as was done in the stimulus
package, for high-cost housing areas so that veterans have more
homeownership opportunities.
Amendment 2: Tax Provisions to Expand Refinancing
Opportunities and Spur Home Buying (HR 5720)
This amendment provides $11 billion in tax benefits, including tax
credits to first-time homebuyers, a real property tax deduction for
non-itemizers, an additional $10 billion in mortgage revenue bonds
for states, and improves access to low-income housing.
• Gives first-time homebuyers a refundable tax credit that
works like an interest-free loan of up to $7,500 (to be paid back
over 15 years) to spur home buying and stabilize the market. The
credit will begin to phase out for taxpayers with adjusted gross
income in excess of $70,000 ($140,000 in the case of a joint
return).
• Provides taxpayers that claim the standard deduction
with up to an additional $350 ($700 for a joint return) standard
deduction for property taxes in 2008.
• Temporary increase in mortgage revenue bond authority to
allow for the issuance of an additional $10 billion of tax-exempt
bonds to refinance sub-prime loans, provide loans to first-time
homebuyers and to finance the construction of low-income rental
housing.
• Temporary increase in low-income housing tax credit and
simplification of the credit to help put builders to work to create
new options for families seeking affordable housing
alternatives.
• Helps returning soldiers avoid foreclosure by
lengthening the time a lender must wait before starting
foreclosure, from three months to one year after a soldier returns
from service.
Amendment 3: Miller/LaTourette
• Clarifies that this act, the National Bank Act, and the
Home Owner's Loan Act do not preempt State foreclosure laws for
national banks or federally chartered thrifts.
Second, the Neighborhood Stabilization Act, (HR 5818), passed
the House by a vote of 239 to 188 on Thursday. The legislation,
sponsored by Representative Maxine Waters, authorizes a $15 billion
federal grant and loan program to help state and local governments
purchase, rehabilitate, and resell or rent foreclosed homes.
For more information, visit www.house.gov.
