By JULIE HIRSCHFELD DAVIS, Associated Press Writer
WASHINGTON - Strapped homeowners could refinance into government-backed mortgages and states would get money to deal with foreclosed property under Democrats’ housing aid plan.
The measures, slated for votes Thursday, constitute the most significant action Congress has taken to date to address the housing crisis that’s at the center of the nation’s economic woes.
President Bush has threatened to veto both measures, which he says reward lenders and speculators. Democrats counter that the bills will head off hundreds of thousands of foreclosures, stabilize the shaky housing market, and prevent neighborhood blight.
The centerpiece of their plan is a bill by Rep. Barney Frank, D-Mass., the House Financial Services Committee chairman, to have the Federal Housing Administration relax its standards and back up to $300 billion in more affordable, fixed-rate loans for borrowers currently too financially strapped to qualify.
Those homeowners could refinance into new loans if their lenders agreed to take substantial losses on the original mortgages. Borrowers would have to show they could afford to make payments on the new loans. They would have to share with FHA at least half of their proceeds if they profited from selling or refinancing again.
The plan is projected to help roughly 500,000 borrowers at a cost of $2.7 billion over the next five years.
A separate bill by Rep. Maxine Waters, D-Calif., would send $15 billion in loans and grants to states for the purchase and rehabilitation of foreclosed properties. Proponents say it will prevent blight in neighborhoods plagued by abandoned, foreclosed homes. More…
So, shrub said he’ll veto, because it “rewards” lenders. But the only way homeowners would qualify, is if lenders agreed to take a LOSS on the original note. Does anyone need anymore proof of how much this administration hates poor and working class people? -Sue
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