John Toscano at the Queens Gazette recently wrote this summary of the recent legislation changes regarding goverment refinance assistance:
Recently enacted legislation intended to remedy the present home ownership crisis in the United States will help struggling homeowners to refinance their mortgages to more affordable government-backed loans which will help them to remain in their homes, Congressmember Carolyn Maloney declared last week.
Maloney, chair of the Financial Institutions and Consumer Credit Subcommittee, addressed the present effort to help homeowners following House passage of the bill entitled, “Expanding American Homeownership Act of 2007″, which was approved by a 348-72 vote.
“Affordable housing is crucial to strong families, strong communities and a strong economy,” Maloney declared. “Unfortunately, an alarming increase in foreclosures and the collapse of the subprime mortgage market have spawned a homeownership crisis in our country. Millions of American families are currently at risk of losing their homes and many more have been priced out of the market.”
The mortgage crisis led to the recent action by the Federal Reserve to lower interest rates for banks. It is hoped the move will make it easier for many homeowners to borrow money.
Maloney said that although the new legislation, reforming certain Federal Housing Administration (FHA) powers that are critical to helping homeowners avoid foreclosure will be very helpful, “We must address the underlying mortgage maker problems that spawned the subprime crisis in the first place,” Maloney said.
Maloney added that the FHA reform bill seeks to modernize the housing agency by providing a reliable source of affordable mortgage loans for first-time homebuyers. She said that in recent years, FHA mortgage insurance has been overtaken by the more flexible lending practices of private lenders.
But, she said, the new legislation, which must still be passed by the Senate, would enable the FHA to serve more subprime borrowers at affordable rates and terms and attract borrowers who have turned to “predatory” loans in recent years. The legislation would also offer refinancing to homeowners struggling to meet their mortgage payments in the midst of the turbulent mortgage markets.
Maloney authored a provision in the approved expansion measure that would help to increase the number of home-based child care centers across the country. She said the amendment would increase the traditional cap on single family home mortgages administered through the FHA by 25 percent. This would help people to purchase larger homes to house a licensed child care facility. Mortgage applicants would need to present a valid childcare license in order to qualify for the loan increase, she said.
