From Realtor Magazine Online, Daily Real Estate News February 25, 2008
Congress is considering several proposals to improve prospects for the housing market.
A bill likely to be debated on the Senate floor Tuesday includes a proposed revision to the U.S. bankruptcy code that would allow judges to cut interest rates and reduce what is owed on troubled borrowers' mortgages. Lenders and many Republicans fiercely oppose the measure.
The proposal also includes $200 million for foreclosure-prevention counseling services and an allowance for states to issue more tax-exempt bonds so housing agencies can help home owners refinance.
Other bills under consideration include a proposal to create a federal corporation, funded with $20 billion, to buy distressed mortgages and help home owners refinance. Another measure would shield banks from lawsuits brought by investors whose holdings of mortgage securities are negatively affected by changes in loan terms or other measures intended to help at-risk borrowers.
The federal Office of Thrift Supervision has proposed a plan that would help 8 million home owners with “upside-down” mortgages to refinance into government-backed loans covering the home’s current value. To make up the difference, lenders would receive a special certificate equivalent to the remainder of the balance owed that they could redeem if the home is sold at a higher price.
Source: Dow Jones International News (02/25/08)
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