A for-sale sign in Elgin, Ill., reflects the glut of homes on the market in suburban Chicago. Many are foreclosure sales.
(Scott Olson/ Getty Images)
Obama gets foreclosure-avoidance bill
A for-sale sign in Elgin, Ill., reflects the glut of homes on the market in suburban Chicago. Many are foreclosure sales.
(Scott Olson/ Getty Images)
WASHINGTON - Congress yesterday sent the president legislation that encourages banks to spare homeowners from foreclosure, after the industry helped scuttle a tougher measure that would have forced lenders to reduce monthly payments of homeowners in bankruptcy.
The House voted 367 to 54 to pass the Helping Families Save Their Homes Act. The Senate had voted 91 to 5 in favor of the bill and approved the final version by unanimous consent.
"In the last few weeks, we have cracked down on corporate and mortgage scams and helped more struggling homeowners keep their homes," said Senate majority leader Harry Reid of Nevada. "And in the coming weeks, we will continue to protect people . . . who keep our economy moving, and we will restore their confidence."
The bill would expand an existing $300 billion program that encourages lenders to write down an individual's mortgage if the homeowner agrees to pay an insurance premium. The program, set to expire in 2011, would swap out a homeowner's high-interest rate for a 30-year fixed loan backed by the Federal Housing Administration.
Because of strict eligibility requirements, only about 50 homeowners are refinancing through the program, compared to the 400,000 people it was estimated to help.
The legislation would expand eligibility. For example, the program currently bans participants who intentionally defaulted on the mortgage or other substantial debt. The Senate bill would narrow that prohibition to defaults within the last five years.
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