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House Gives Final Nod to Housing Bill
Jul 23, 10:07 AM
Hartford Courant’s “On Background Blog”
By Jesse A. Hamilton
The U.S. House of Representatives has overwhelmingly passed the long-awaited housing rescue bill — sending it now for a last Senate approval before President Bush can sign it into law.
The vote, at about 5 p.m., went 272-152.
It will now be the Senate’s turn and, except for some expected resistance that could delay the bill for a short time, the chamber will likely pass the measure with a similar high ratio. And though President Bush had long threatened to veto it, a recently added provision to help out mortgage firms Fannie Mae and Freddie Mac has convinced the White House to promise a presidential signature.
The bill will do a number of things, but the section that homeowners in crisis are most concerned with is the one that Sen. Chris Dodd helped author: the foreclosure prevention program. It will allow people with subprime mortgages they can no longer afford to enter into voluntary deals with their lenders, refinancing the loans for less than the current market value of the homes at a 30-year fixed rate. (The Federal Housing Administration will guarantee $300 billion in such loans, and the defaults will be paid out of Fannie and Freddie revenues.)
The program will need to be established, so it likely wouldn’t start for a few months. (Here’s a description of how one might qualify.)
“This legislation is a message of hope to families and a message of confidence to the market place,” said Rep. Chris Shays, R-4th District. “Given the 71,000 outstanding subprime loans in Connecticut alone, this legislation is long overdue to bring relief to struggling homeowners, greater oversight to the industry and to ensure the continued viability of the mortgage market.”
“Our economy has been rocked by the aftershocks of our nation’s housing crisis. This bill aims to take control of the situation and restore public and market confidence in the economy, while ensuring that hundreds of thousands of Americans can stay in their homes,” said Rep. Chris Murphy, D-5th District.
