DOLE VOTES TO AID HOMEOWNERS
Major Housing Legislation Passes Senate, Achieves Several Goals Of Dole's Economic Security Plan
U.S. Sen. Elizabeth Dole today voted to pass bipartisan legislation designed to help homeowners avoid foreclosure and stabilize the housing market.
"A home is often the single biggest investment a family makes, and the economic security of our families depends on the health and stability of the housing market," said Dole.
"Because of the subprime lending crisis, we've seen a significant increase in the number of North Carolina families facing foreclosure over the past year. This plan confronts that challenge by providing relief to families that need it and corrects structural problems in the housing market that contributed to this downturn."
The centerpiece of the Housing and Economic Recovery Act of 2008 is a measure allowing the Federal Housing Administration to back $300 billion in affordable loans for distressed homeowners who otherwise could not qualify them. This program will allow borrowers to work with their lenders to refinance their mortgages, in return for the lender taking a financial loss and sharing future profits on participating loans with the government.
The bill also creates a new regulatory authority for Government Sponsored Enterprises (GSEs), which Dole, a member of the Senate Committee on Banking, Housing and Urban Affairs, has long supported. GSEs such as Fannie Mae and Freddie Mac, which purchase the mortgages made by brokers, banks and finance companies, now account for more than 80 percent of the mortgage market. In recent years, the GSEs have been involved in accounting scandals, financial mismanagement and intensive lobbying activities. Dole has persistently pressed for a new, world-class regulator to guard against these dangerous practices, particularly considering their significant impact on the housing sector, taxpayers and the overall economy.
"GSEs should be constructive, reliable players in the marketplace, not wildcards that drag down our economy and expose taxpayers to costly bailouts," said Dole. "The need for fundamental GSE reform has been apparent for some time, and I'm pleased this legislation will install a new, stronger regulator to protect consumers and taxpayers."
In addition to reforming GSEs, the bill achieves several other goals outlined in Dole's Economic Security Plan, including:
·Providing $150 million for pre-foreclosure counseling, which will be distributed by the Neighborhood Reinvestment Corporation by the end of 2008 and aid as many as 250,000 families;
·Helping returning soldiers avoid foreclosure by mandating an additional six-month buffer against foreclosure proceedings, establishing a financial counseling program within the Department of Defense, and increasing the VA loan guarantee amount to give soldiers greater homeownership opportunities;
·Expanding eligible home loans for early disclosures under the Truth in Lending Act (TILA), requiring disclosures be provided no later than seven days prior to closing, and increasing the statutory damages for violating TILA guidelines; and
·Establishing a toll-free hotline to assist homeowners with housing questions and coordinate homeowner assistance with government and non-profit agencies.
The bill also includes a temporary increase in the low-income housing tax credit, simplifies the housing tax credit, creates a refundable first-time homebuyer tax credit, temporarily increases mortgage revenue bonds and helps guard against identity theft by protecting taxpayer Social Security numbers in real estate transactions.
The Senate approved the Housing and Economic Recovery Act of 2008 in a 63-5 vote. The bill will now be sent to the House.