A recent MarketWatch article reports that House Speaker Nancy Pelosi is pressing for a stipulation requiring some of the approved financial bailout money to be allocated for preventing home foreclosures. She’s supporting Congressman Barney Frank, the chairman of the House Financial Services Committee, who is working on a bill to require the Treasury to modify mortgages at risk for defaulting as part of receiving the next $350 billion of the bailout money approved on October 3rd. The bill may also press for buying individual mortgages or mortgage backed securities. They’re targeting January of 2009 to pass this bill.
This may be following up on the proposal set forth by Federal Deposit Insurance Corp (FDIC) chairwoman Sheila Bair. Bair has asked for $24.4 billion dollars to set up a mortgage modification program. The chairwoman believes that it could be instrumental in averting 1.5 million home foreclosures.
Depending on when and if this bill is enacted, you may soon get Federal help to avoid foreclosure if you’re still in a pre-foreclosure situation. If you think you need help sooner, you may want to check out the Web site sponsored by the Homeownership Preservation Foundation on this link. If you’re past that point though, be sure to check out some of our information about transitioning back to the rental market.
Tags: Congressman Barney Frank, fdic, foreclosure, foreclosure forbearance, home foreclosures, homeownership preservation foundation, House Speaker Nancy Pelosi, mortgage, mortgage modification, mortgage modification program, pre-foreclosure, rental market
Yes, it is important to keep people who can still afford the original loan payment in their homes. But they represent only half of the problem. The economic conditions are causing more and more people to lose their homes because of income reasons. These people need to be able to get to affordable housing while gracefully leaving their current homes. This is where Sheila Bair’s 4.5% purchase money loans would help. Many of the troubled homeowners will be able to get to smaller, more affordable housing under the plan.
Focus has been on those affected by reset payments — less and less as rates come down. It is the homeowners who no longer can make the interest payments let alone any principle who need our focus now.