New Program to Help Homeowners

The major bank lenders who are already participating in the Hope Now program will announce a new plan tomorrow designed to further aid desperate homeowners facing foreclosure. Although Hope Now has been somewhat of questionable benefit to date due to its tight limits on eligibility, under this new plan, borrowers will apparently get better contact and information as they try to stave off foreclosure.

Homeowners will receive an acknowledgment within five days of making contact with their lender. Additionally, lenders will pledge to remain in close contact with the borrowers while the review of their mortgages is underway.


Unfortunately, this agreement is not planned to be legally binding.

New Help At the State Level

Just as there are various plans approved or in process at the Federal level, there are a number of foreclosure-related bills currently under discussion in the California state legislature. The main ones of interest are:
1.) SB1137: passed by the state Senate earlier in the year, this would require lenders to contact homeowners earlier than at present in the foreclosure process,give 60 days notice to renting tenantgs in homes likely to be foreclosed upon and require foreclosing lenders maintain the physical condition of homes to avoid blight. In addition to the Senate, it has already passed the Assembly Banking Committee and is scheduled to be heard by the Assembly Appropriations Committee.
2.) AB1830: Passed by the Assembly on May 29, this bill would tighten underwriting standards for future sub-prime loans; ban pre-payment penalties and eliminatge 'steering' of borrowers to higher interest rate loans by loan brokers.
3.) AB2740: Sets new rules on how loan servicers deal with homeowners. It is modeled on a similar bill that became law last year in North Carolina.

There are others as well, but these appear at this time to be the most relevant.

More News!

Yesterday I updated everyone on the status of Senate action on a foreclosure relief bill to be worked into some form of relief along the lines of the Frank bill from the House. Later yesterday, the Senate Banking Committee passed its version of the bill I discussed by a vote of 19-2, with all the Republican members except Bunning of Kentucky and Enzi of Wyoming voting to pass it. It will provide a large amount of foreclosure relief along the lines I discussed yesterday, and now goes to the full Senate for a vote, probably sometime in the next month or so. While the White House hasn't said what they intend to do about the Senate version, other than they don't like it, they have specifically threatened a veto of the Frank bill.

Solution for you: WRITE TO YOUR CONGRESSMAN AND SENATORS!!

More News on Mortgage Assistance

Well, three days ago I'd noted that the Senate was debating its version (similar but not exactly the same) of Barney Frank's bill that passed the House recently. Yesterday, the chairman of the Senate Banking Committee, Sen. Dodd of Connecticut, accompanied by the ranking Republican, Sen. Shelby of Alabama, announced that their bill has reached the stage of proceeding forward on a bi-partisan basis. It will allow the FHA to support up to $300 Billion in new loans to homeowners facing foreclosure who might otherwise be unable to refinance. Money for the plan would come from an affordable housing plan funded by profits of Freddie Mac and Fannie Mae. Borrowers would have to demonstrate that they could afford the new loans, and lenders would have to agree to take a cut in their planned profits as a result of the swap from existing loans to the new ones.

The Bush administration, on record with a veto threat for Rep. Frank's version, has not yet taken a position on this bill. Stay tuned.

Here's The Latest!

Well, a couple of weeks ago you may recall I mentioned that a new piece of legislation was wending its way through Congress. This was Barney Frank's bill to vastly expand the funds for foreclosure counseling, freeze high rate loans at a lower fixed rate, and reopen the bankruptcy laws for certyain specifically limited mortgage-related situations/individuals.
It has since passed the full House by a healthy margin, although not enogugh to be veto-proof. It has yet to clear the Senate, although indications are that it will do so, probablybefore the Congress recesswes for its summer vacation. Bush has loudly proclaimed he will veto it as "too unreasonable and too expensive". From this corner,it looks like exactly what the country could use in terms of relief, but to make it so someone has to convince a larger number of Congressmen/women and Senators to vote for it, enough to insure a veto-proof majority of 2/3 of each house of Congress. Let your congressional representatives and Senators know how you feel--and remind them that November is not that far off!

Here's The Latest!

Latest on the Legislative Front

Well, in past posts I've discussed laws that have either been passed or that are pending passage. Today, I'm going to update the latter. The Senate's just passed a bill that will provide $10 Billion for refis of subprime mortgages, $4 Billion for purchase of foreclosed properties and $180 Million for foreclosure counseling. No bankruptcy assistance was included. Most consumer/borrower advocates claim this is far to little in terms of helping them, but it was an 84-12 vote, so both parties agreed.
Far more borrower oriented and more helpful to them is a bill just passed out of committee by Barney Frank's Financial Serviceds committee. This would provide a great deal more assistance to homeowners trying to avoid foreclosure by handling refis and other assistance to the homwowners. The Bush White House has voiced opposition, and hinted at a veto, so whatever assistance finally gets passed will still be a way off.