With the foreclosure crisis reaching unprecedented levels, Senate Republican Minority Leader Mitch McConnell and Senate Majority Leader Harry Reid have reached an agreement to craft a bi-partisan housing bill aimed at helping families facing the loss of their home.
Critics watching the Senate forge the plan, however, question whether the bill would help families facing foreclosure or the lenders facing financial losses on repossessions.
Jennifer Morris, McConnell’s press secretary, confirmed to WND today Senate Banking Committee chairman Christopher Dodd, D-Conn., and the committee’s ranking Republican, Sen. Richard Shelby of Alabama, held closed door meetings throughout the day finalizing the language of a bill to bring to the floor of the Senate.
Late today, Dodd and Shelby announced that final language on the Foreclosure Prevention Act of 2008, the proposed legislation, had been delayed until tomorrow.
But summary points released by Dodd and Shelby included $4 billion in Community Development Block Grant Funds to be used by communities hardest hit by foreclosures and delinquencies to purchase foreclosed homes at a discount and to rehabilitate or redevelop the homes to stabilize neighborhoods and stem the losses in house values of neighboring homes.
Until language of the compromise bill is available, it remains unclear whether the $4 billion in grants would be available to prevent any families from losing their homes or would be available for community purchase only after foreclosed homes had been repossessed by lenders.
The compromise legislation also would provide $100 million in additional funding for the Neighborhood Reinvestment Corp. to be used this year.
A position paper released by McConnell’s office called for state housing finance agencies to issue up to $10 billion in tax exempt bonds with the proceeds being used to refinance subprime mortgages.
Other key features sought by McConnell include providing $15,000 tax credits for the purchase of a home in or approaching foreclosure and extending the current three-month delay of any looming foreclosure for a returning GI deployed overseas to six months.
The compromise language released by Dodd and Shelby today suggested the bill would delay foreclosures on returning GIs deployed overseas to nine months.
Also proposed in the compromise legislation were reforms to the Federal Housing Administration program, extending various limits to qualify additional families for FHA loans.
“The package that we agreed to is not perfect, nor will it solve all the problems that the economy and the American homeowners are facing today,” said a joint statement released by Dodd and Shelby. “But it is an important step, and sends a strong message to the American people that Congress is willing to put aside our partisan differences and come together to tackle the challenges at hand.”
Realty Trac reported foreclosure filings during 2007 were up 75 percent from 2006, with more than 1 percent of all U.S. households in some stage of foreclosure during the year.
Last week, the Wall Street Journal reported 2 percent of all home loans were in foreclosure, double the rate over the past 28 years and the highest foreclosure rate since the Mortgage Banking Association began collecting data in 1979.
The Denver Post reported yesterday home foreclosure liquidators are offering dispossessed homeowners as much as $900 simply for agreeing to leave the property without stealing appliances or otherwise damaging or vandalizing the property in their anger and frustration.
In one anecdote, the Denver Post told the story of a little girl who had written a note in a walk-in closet, “Dear Bedroom, I’m going to miss you. When I get older, I’ll buy you back.”
The Cleveland Plain Dealer reported yesterday Ohio has launched a program where 1,100 lawyers from across the state have volunteered under a “Save the Dream” program to provide free legal assistance to Ohioans making under $54,000 a year who are in danger of losing their homes.
The paper disclosed data compiled by the Ohio Supreme Court showed more than 83,000 foreclosures were filed during 2007, the most in the history of the Buckeye State, while Cleveland, Akron, Toledo, Dayton, Columbus and Cincinnati were all ranked among the top 50 cities in the country in foreclosed properties.
The Federal Reserve Bank of New York has posted a dynamic map of subprime mortgage conditions in the United States, displaying statewide, county specific and zip code variations the condition of securitized, owner-occupied subprime mortgage loans.
On Monday, the New York Times reported the Congressional Budget Office is projecting a record 28 million Americans will receive food stamp assistance in 2008.
The Times also reported one in eight Michigan residents, 12.5 percent, are now receiving food stamps.
Media wishing to interview the author of this article, please e-mail Tim Bueler.