Anti-Foreclosure Bill

Tags: Foreclosure, lenders, loans, nevada
Posted in Foreclosure, May 9th, 2008 |

House Democrats are going ahead with a bill, which will offer states $15 billion in grants and loans to buy and revamp deserted homes. The Bush administration has threatened to veto this legislation. The White House’s Office of Management and Budget said that if the bill were to be presented to President George W. Bush, he would veto it, on the advice of his senior advisers. According to a statement released in Washington today, the White House has said that the ones to benefit from this plan would be private lenders – who now own abandoned property- rather than homeowners who have been struggling hard to prevent their homes from going into foreclosure. However, the House Democrats still plan to go ahead with the measure tomorrow.

The measure has been initiated by the House Democrats. The U.S. House of Representatives may have to weigh tomorrow as lawmakers try to arrest this foreclosures in the wake of the sub prime mortgage crisis. According to Irvine, California based RealtyTrac Inc, the foreclosure filings have shot up by 57 percent in March from the previous year.

The plan proposed by the House Democrats is as follows. The states would repair the abandoned homes. They would find people to stay in these homes since, according to lawmakers, the foreclosed property bring down the value of the neighbouring properties. Funds would be allotted based on a state’s percentage of foreclosure. Obviously therefore, the worst victims such as Ohio and Nevada would benefit the most.

According to the OMB, the above-mentioned legislation would just create an incentive for more lenders to foreclose rather than sort out matters with homeowners. However, the House Financial Services Committee Chairman Barney Frank, who put forward the plan in March, refused to accept the criticism, stating the Federal Reserve’s rescue of Bear Stearns. The House has decided to take into consideration Frank’s plan to allow the Federal Housing Administration insure up to $300 billion in mortgages, only after loan holders agree to cut down the principal. This legislation has brought in negative attention from House Republicans at a press conference in Washington.

John Boehner is a House Minority leader and an Ohio Republican. He said that they were talking about a $300 billion bailout for those people who were scamming the market. Besides, the lawmakers have also put forward another plan. It includes a one-time homebuyer tax credit of up to $10,000.