WASHINGTON, DC – Congressman Bill Delahunt today voted for legislation that will expand the Federal Housing Administration’s authority to back mortgages that will help low and middle income families avoid foreclosure.

The House passed H.R.  1852, the “Expanding American Homeownership Act of 2007,” by a vote of 348 to 72.

“As foreclosures rise, this legislation will allow the federal government to back refinanced loans for struggling homeowners who find their mortgage rates are resetting to drastically higher levels,” Delahunt said. He added that “this legislation is an important first step in helping to ensure that first time home buyers aren’t forced into agreeing to terms that they are unable to afford.” 

This legislation, which was originally introduced by Congresswoman Maxine Waters and House Financial Services Committee Chairman Barney Frank, will allow the Federal Housing Administration to serve higher risk borrowers who would otherwise turn to predatory and high priced mortgage loan alternatives.  It would also offer refinancing opportunities to those who are currently struggling to meet their mortgage payments. 

Specifically, this bill would:

• Lower down payment loans for borrowers that can afford mortgage payments, but do not have enough money for the required down payment.
• Double the current funding level for housing counseling for subprime borrowers late on loan payments.
• Give the FHA the authority to provide mortgage loans to qualified higher risk borrowers, without unfair fee hikes on these borrowers
• Increase the FHA’s reverse mortgage loan program
• Raise the FHA multifamily loan limits
• Authorize up to $300 million a year from the bill’s excess profits for affordable housing
• Raise the FHA loan limit in each area to the lower (a) 125% of the local area median home price or (b) 175% of the national GSE loan limit. It also would give HUD the authority to raise loan limit amounts up to $100,000 if market conditions warrant.

The House also adopted an amendment that would direct FHA to make available refinancing loans to existing qualified homeowners who are in default or at risk of default due to rate resets or mortgage market conditions, and to authorize lower down payments for such purpose.  This includes provisions to address problems arising from inflated appraisals. This proposal now moves on to the U.S. Senate.

To view a copy of H.R. 1852, the “Expanding American Homeownership Act of 2007,” please click here.

 

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