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The New Direction Congress has taken a number of steps to begin to address the mortgage crisis and will continue this critical work in the coming weeks.  Despite the slow and insufficient response of the Bush Administration, the New Direction Congress remains committed to working with the Administration to stabilize the housing market and provide relief to American families struggling in our weakening economy.  The New Direction Congress has taken the following actions to provide relief to millions of families:

Measures Enacted into Law

  • Expand affordable mortgage loan opportunities through the Federal Housing Administration for families in danger of losing their home by increasing the FHA loan limits up to $729,750 (Economic Stimulus);
  • Prevent homeowners from facing a tax bill at the same time that they are losing their homes (H.R 3648, Mortgage Forgiveness Debt Relief); and,
  • Expand financial counseling for families in danger of losing their homes through foreclosure (FY 2008 Omnibus Appropriations).

Measures Passed by the House

  • Strengthen consumer protections against risky housing loans in the future (H.R. 3915, Mortgage Reform and Anti-Predatory Lending Act);
  • Expand affordable mortgage loan opportunities for families in danger of losing their homes through Federal Housing Administration reform (H.R. 1852). This bill, passed by both the House and Senate and supported by the White House, has been held up by Republican Sen. Shelby due to his opposition to continuing the temporary FHA loan limit increase in the economic stimulus bill;
  • Strengthen regulations of Fannie Mae and Freddie Mac and raise their loan limits to increase liquidity in the mortgage market (H.R. 1427, Federal Housing Finance Reform Act); and
  • Increase the supply of affordable rental housing to address the current shortage and help families who have lost their homes in the current crisis. (H.R. 2895, The National Affordable Housing Trust Fund Act).

Upcoming Action

Chairman Frank will soon act on additional comprehensive legislation to address the housing crisis.  This legislation will help to stabilize the housing market, which is a critical step in turning around the economy.

  • The measure expands the FHA program so that borrowers at-risk of foreclosure can refinance into mortgages they can afford to repay. This legislation may help between 1 and 2 million borrowers avoid foreclosure, while minimizing taxpayer exposure.
  • This is no bailout for lenders or borrowers. FHA will guarantee refinanced loans only if the lender takes a significant loss by reducing the loan principal to below current appraised value and the consumer can repay the new loan and agrees to share any future gains with government.
  • To prevent housing values from further eroding in neighborhoods with foreclosed homes, Chairman Frank's legislation will loan $10 billion to states and localities for the purchase and rehabilitation of foreclosed properties.
  • Everybody is worse off without this legislation - homeowners, lenders, neighbors, indeed our entire economy all lose when a foreclosure occurs instead of an appropriate refinancing.
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