12.14.07
Whitehouse Praises Move to Expand Federal Loan Insurance to More Families
Amidst Mortgage Crisis, Senate Passes Bill to Aid Homeowners
Whitehouse Praises Move to Expand Federal Loan Insurance to More Families
Washington, D.C. – Rhode Island families at risk of
high mortgage payments or foreclosure got some much-needed help in Washington
today as the Senate approved legislation strengthening federal homeowners’
insurance aimed at middle- and low-income homebuyers. With the security of
Federal Housing Administration (FHA) insurance, lenders can give reasonable
mortgage rates to homebuyers who otherwise might be pushed into the subprime
market.
U.S. Senator Sheldon Whitehouse
(D-R.I.) applauded the passage of the FHA Modernization Act of 2007 (S. 2338),
which will help more working families afford to purchase or stay in their
homes.
“For the millions of Americans
working hard and saving to purchase a home, a risky sub-prime mortgage shouldn’t
be their only option,” Whitehouse said. “Expanding federal loan insurance will
help bring their dream of homeownership closer to reality and will give existing
homeowners more flexibility to refinance.”
For months, declines in the
housing market nationwide have led to a dramatic increase in foreclosures rates,
particularly among low- and middle-income homeowners with subprime mortgage
loans. A June 2007 report by the Government Accountability Office (GAO) found
that as the market for subprime loans has grown, FHA’s market share has fallen,
particularly among minority borrowers – meaning that fewer and fewer homeowners
are benefiting from stable, secure federal homeowners insurance. In Rhode
Island, the number of FHA-backed loans dropped from 3,085 in 2001 to just 481 in
2005 – an 85 percent decline.
S. 2338, which passed 93 to 1,
will expand both minimum and maximum loan levels and simplify downpayment
requirements to make Federal Housing Administration loan insurance available to
more working families. The bill will also increase access to post-purchase
homeownership counseling for low- and moderate-income homeowners having
difficulty making their mortgage payments; remove caps on certain “reverse
mortgages,” which allow seniors to convert the equity in their homes into cash;
and create a pilot program aimed at broadening access to credit for borrowers
without sufficient credit histories at traditional credit
bureaus.
Whitehouse is a cosponsor of
several other measures to address the mortgage crisis, including: the Mortgage
Disclosure Act of 2007 (S. 2153), introduced by Senator Jack Reed (D-R.I.),
which would strengthen mortgage disclosure standards for consumer mortgages to
ensure subprime borrowers know their payments could increase substantially; the
Home Ownership Preservation and Protection Act of 2007 (S. 2452), introduced by
Senator Chris Dodd (D-Conn.), which would prohibit a number of unscrupulous
lending practices and give homeowners in default of their mortgages new tools to
stave off foreclosure; and the Helping Families Save Their Homes Act (S. 2136),
introduced by Senate Majority Whip Dick Durbin (D-Ill.), which would give
homeowners new leverage in staving off foreclosure and keeping their homes in
the event of bankruptcy.
###
Washington, D.C. – Rhode Island families at risk of
high mortgage payments or foreclosure got some much-needed help in Washington
today as the Senate approved legislation strengthening federal homeowners’
insurance aimed at middle- and low-income homebuyers. With the security of
Federal Housing Administration (FHA) insurance, lenders can give reasonable
mortgage rates to homebuyers who otherwise might be pushed into the subprime
market.
U.S. Senator Sheldon Whitehouse
(D-R.I.) applauded the passage of the FHA Modernization Act of 2007 (S. 2338),
which will help more working families afford to purchase or stay in their
homes.
“For the millions of Americans
working hard and saving to purchase a home, a risky sub-prime mortgage shouldn’t
be their only option,” Whitehouse said. “Expanding federal loan insurance will
help bring their dream of homeownership closer to reality and will give existing
homeowners more flexibility to refinance.”
For months, declines in the
housing market nationwide have led to a dramatic increase in foreclosures rates,
particularly among low- and middle-income homeowners with subprime mortgage
loans. A June 2007 report by the Government Accountability Office (GAO) found
that as the market for subprime loans has grown, FHA’s market share has fallen,
particularly among minority borrowers – meaning that fewer and fewer homeowners
are benefiting from stable, secure federal homeowners insurance. In Rhode
Island, the number of FHA-backed loans dropped from 3,085 in 2001 to just 481 in
2005 – an 85 percent decline.
S. 2338, which passed 93 to 1,
will expand both minimum and maximum loan levels and simplify downpayment
requirements to make Federal Housing Administration loan insurance available to
more working families. The bill will also increase access to post-purchase
homeownership counseling for low- and moderate-income homeowners having
difficulty making their mortgage payments; remove caps on certain “reverse
mortgages,” which allow seniors to convert the equity in their homes into cash;
and create a pilot program aimed at broadening access to credit for borrowers
without sufficient credit histories at traditional credit
bureaus.
Whitehouse is a cosponsor of
several other measures to address the mortgage crisis, including: the Mortgage
Disclosure Act of 2007 (S. 2153), introduced by Senator Jack Reed (D-R.I.),
which would strengthen mortgage disclosure standards for consumer mortgages to
ensure subprime borrowers know their payments could increase substantially; the
Home Ownership Preservation and Protection Act of 2007 (S. 2452), introduced by
Senator Chris Dodd (D-Conn.), which would prohibit a number of unscrupulous
lending practices and give homeowners in default of their mortgages new tools to
stave off foreclosure; and the Helping Families Save Their Homes Act (S. 2136),
introduced by Senate Majority Whip Dick Durbin (D-Ill.), which would give
homeowners new leverage in staving off foreclosure and keeping their homes in
the event of bankruptcy.
###
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