The Latest On Possible Relief

As I mentioned five days ago, Congress is getting closer to passage of a new foreclosure relief bill. Today the Senate passed it by a huge margin. Now its differences must be reconciled with the House bill, after which it goes to the desk of the President. Bush has said he will veto it, claiming it's a bailout of the banks and also rewards what he terms irresponsible borrowing by the homeowners who, in his opinion, should have known better than to assume this much debt under the conditions of the loans made. Talk about blaming both ends of the same issue. This bill, once both versions match, is by far the best idea to come out of Congress in years, in the humble opinion of this observer. It directly deals with the major portion of the largest financial crisis since at least the Savings and Loan debacle of the 80's and perhaps the Depression. If you are in need of support on your home loans, call or write your representatives in the House and Senate and get this bill to the President's desk, and do it with such a large margin that even if it is vetoed, the veto can be overridden. That is a MUST!

Arrests and Veto Overrides

Two important things happened today, and at least one of them could provide vital assistance to homeowners fearing loss of their homes to foreclosure. The one that Could help homeowners is the one we've discussed here on a number of previous occasions--the Frank bill from the House of Representatives and its Senate mirror image. All along the Bush White House has threatened to veto the bill, saying it would be too costly and also could 'unfairly' cut into lender profits (as if all of the foreclosures weren't doing EXACTLY that already).

The Senate today beat back Republican attempts to gut the bill and passed it by veto-proof margins. Subject to a committee review of its effects vis-a-vis Countrywide, it may soon actually get to Bush's desk for his signature, and, if vetoed, back to both houses of Congress for the override vote.

The other item of interest, although too soon to see if it will be a basis for further assistance to homeowners and those who've already lost their homes, is a large mortgage fraud sting by the FBI. Citing various alleged violations of mortgage fraud laws, the Bureau obtained indictments or arrested hundreds of lenders from at least 19 separate lending institutions today. The makeup of the accused ranged from executives at the leading investment banking firm, Bear Sterns to employees of a number of other mortgage lenders and brokers. Is this too little-too late? Only time will tell. Stay tuned.

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!