White House Opposes Frank Foreclosure Plan
The House Financial Services Committee this week considered plans to provide foreclosure relief for strapped borrowers. On April 23, the panel voted 38-26 to approve a measure that would provide $15 billion in loans and grants that local governments could use to house low-income families and to purchase and rehabilitate homes in foreclosure.
The following day, the committee began debate on legislation (H.R. 5830) put forth by Chairman Barney Frank (D-Mass.) that would allow the FHA to insure up to $300 billion in refinanced mortgages – but only after lenders cut down the size of the loan first to make them more affordable to borrowers. While the committee is expected to complete consideration of H.R. 5830 on April 30, the Administration has already come out in opposition to the measure.
Roy Bernardi, Housing and Urban Development deputy secretary, sent a letter to Frank warning that the Administration “strongly opposes” the bill. “This legislation may come at a cost to taxpayers who are not participating in the new program,” Bernardi wrote. “An attempt to shift costs to taxpayers would constitute a bailout.” Nevertheless, Frank has expressed hope that the House will act next month on his plan – either as a stand-alone bill or part of a broader housing package.
Meanwhile, Senate Banking Committee Chairman Chris Dodd (D-Conn.) plans to hold a markup on May 6 to consider his HOPE for Homeownership proposal, legislation similar to Frank’s that would create a new initiative within the FHA to refinance mortgages of distressed home owners. Dodd has also indicated that he hopes to consider a GSE reform package on the same day. At this point, no Senate legislation regarding the overhaul of Fannie Mae and Freddie Mac has been introduced.
Outcome Uncertain
The situation remains fluid and it is still unclear whether these bills will move forward individually or be merged into a giant housing package. The Senate on April 10 approved a housing stimulus bill (H.R. 3221) that would provide a temporary tax credit for purchasers of foreclosed properties, modernize the FHA and permanently raise the maximum loan amount that the agency could insure to $550,000, allow businesses to carry back net operating losses for four years and expand the mortgage revenue bond program.
The House Ways and Means Committee approved its own housing stimulus legislation at about the same time the Senate acted. The House legislation would create a first-time home buyer credit of up to $7,500 for the purchase of any home with the next 12 months. The credit would be available for married couples making up to $140,000 annually ($70,000 for singles). And it would significantly enhance the Low Income Housing Tax Credit and tax-exempt housing bond programs.
Builders to Deliver Urgent Message to Capitol Hill
NAHB is monitoring developments closely and continues to push House members to move quickly to bring a final bill to the House floor. More than 1,200 builders will come to Capitol Hill on April 30 to attend NAHB’s Legislative Conference and urge their members of Congress to move quickly to pass housing stimulus legislation that will jump-start housing and the economy. For those builders who cannot attend, NAHB’s grassroots is setting up an 800 phone number so that members can contact their lawmakers on April 30 and advocate for housing issues.
In conjunction with the Legislative Conference, NAHB will be running ads next week in CQ Weekly, Roll Call, Politico, CQ Today and CongressDaily AM. Our message: Congress can avert an economic crisis, save jobs and restore confidence in the housing and financial markets, if it listens to the urgent message that home builders will be delivering on April 30.
As the House stimulus bill goes forward, and is reconciled with the Senate version, NAHB will continue to work with Congress to produce the best legislation possible. To view legislation, click here and type the bill number in the box in the upper center screen. For more information, contact Scott Meyer at 800-368-5242, x8144.
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