Rep. John Carter (TX-31) today co-sponsored the Homeownership Protection and Housing Market Stabilization Act of 2008 which complements current public and private efforts to help struggling homeowners, protect homebuyers from predatory lending practices, and address underlying problems in the housing market in a way that precludes further problems and reduces the need for costly taxpayer-financed bail-outs.

“Congress must work together to address the housing crisis and possible solutions to tackle the economic concerns of middle-class American families.  One thing is certain-raising taxes on the back of an uncertain economy is irresponsible and will only add to the problem.  The proposal I co-sponsored today addresses the root causes of the subprime mortgage crisis and notably enhances buyer protections without tax-payer funded bail-outs or rewarding fiscal irresponsibility.”

 The Housing Market Stabilization Act furthers these objectives in the following way:

• Protect consumers from disreputable mortgage practices through establishment of new registration and licensing requirements for all mortgage originators.

• Improve the FHA’s ability to help struggling homebuyers by passing long-overdue reforms and expanding participation in a program that helps subprime borrowers transition into more sustainable FHA loans.

• Improve regulation of Government Sponsored Enterprises such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks through provisions from GSE reform legislation that overwhelmingly passed the House last year.  

• Provide homebuyers’ access to better information through improved disclosures for borrowers and increased support for counseling on housing matters.

• Encourage loan modifications by providing a safe harbor from legal liability to servicers that modify loans and allowing Federal banking agencies to consider a bank’s record of moving borrowers into more affordable products when considering their Community Reinvestment Act obligations. 

• Promote responsible borrowing by requiring that subprime mortgages have escrow accounts for taxes and insurance at the time the loan is consummated.

• Help veterans by temporarily raising loan limits for VA housing loans, and doubling foreclosure protections for returning veterans.