Senate Passes New Housing Stimulus Bill

Press Release

Senate Passes New Housing Stimulus Bill

McCaskill says legislation will help Missouri recover from the foreclosure crisis

U.S. Senator Claire McCaskill today voted to bring relief to Missourians facing foreclosure and to the struggling housing market. McCaskill and her colleagues today passed the Housing and Economic Recovery Act of 2008 which aims to help stabilize the housing market by addressing the ongoing foreclosure crisis that is expected to affect nearly 20,000 Missourians by the end of 2009. The legislation builds upon a housing reform bill debated and passed by the Senate earlier this year.

"If my foreclosure clinics have taught me one thing, it's that there are far too many hard working Missourians losing their homes," McCaskill said. "This bill will assist hardworking Missourians save their homes, and will provide essential stability to our housing market. Our economy needs both very badly."

McCaskill has held five clinics across the state to bring together resources to help those facing or recovering from foreclosure, including community organizations, banks, and staff from the U.S. Department of Housing and Urban Development, but has said that the government needs to do more legislatively to help Americans. The bill passed today by the Senate will help distressed borrowers refinance, create national standards for mortgage lenders, provide foreclosure counseling to those in need, help to stabilize the mortgage lending markets, and provide tax relief to help the housing market recover. The President is expected to sign the legislation into law.

Housing and Economic Recovery Act of 2008 includes:

* The HOPE for Homeowners Act which would create a new, temporary, and voluntary program within the Federal Housing Administration (FHA) to back FHA-insured mortgages to distressed borrowers. These new mortgages offered by FHA-approved lenders would refinance distressed loans at a significant discount for homeowners at risk of foreclosure.

* The SAFE Mortgage Licensing Act which would create a Nationwide Mortgage Licensing System and Registry that would establish minimum national standards for all residential mortgage brokers and lenders in an effort to curb abusive lending practices.

* The Foreclosure Prevention Act which would modernize, streamline, and expand the reach of the Federal Housing Administration to ensure that additional families can access safe, fixed-rate mortgages. Specifically, it would provide assistance to communities devastated by foreclosures, foreclosure counseling for families in need, programs to help returning soldiers avoid foreclosure, and mortgage disclosure enhancements. These measures reflect legislation the Senate passed earlier this spring.

* Provisions allowing the Treasury Department to provide a line of credit to Government Sponsored Enterprises (GSEs), such as Fannie Mae and Freddie Mac, to stabilize the housing market and provide relief for strapped lenders. Additional GSE reforms will enhance the affordable housing missions in order to foster responsible home lending and promote the construction of much needed affordable rental housing.

* The Housing Assistance Tax Act which provides tax relief measures for homeowners, homebuyers, and homebuilders aimed at helping the housing market recover.

* Assistance for communities devastated by foreclosures through $3.92 billion provided in the form of supplemental Community Development Block Grants (CDBG) to purchase foreclosed homes, at a discount, and rehabilitate or redevelop the homes to stabilize neighborhoods hit hardest by foreclosures and delinquencies.

* Revenue provisions to ensure that the legislation is paid for in a fiscally responsible manner.

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