U.S. Senator Lamar Alexander (R-Tenn.) today made the following statement after voting for the Housing bill (H.R. 3221), which the Senate approved today by a vote of 72 to 13:
“I voted for this extraordinary but essential step to restore confidence to housing markets and homeowners,” Alexander said. “Anything less bold would have, in the end, been a greater risk to taxpayers and the economy. This bill will create a tax credit for first-time home buyers, toughen regulations for Fannie Mae and Freddie Mac and create a way for homeowners to refinance delinquent mortgages if their lenders agree. Stabilizing the housing market and finding a solution to high gasoline prices are the two most important things we can do to help families struggling to balance their budgets.”
The Foreclosure Prevention Act of 2008 (H.R. 3221) includes the following provisions:
• Provides a refundable tax credit of up to $7,500 for first-time homebuyers, and a standard property tax deduction for taxpayers who don’t itemize on their returns ($500 for individuals and $1,000 for joint filers).
• Establishes a new, temporary FHA program (“HOPE for Homeowners”) to help up to 400,000 homeowners who are at risk of losing their homes to refinance their mortgages, if their lenders voluntarily agree to participate in the program.
o The program will be paid for using fees paid by Fannie Mae and Freddie Mac – not taxpayer dollars.
o Only certain owner-occupants would be eligible to refinance – no investors or investor properties will qualify.
o It is set to run from Oct. 1, 2008 to Sept. 30, 2011.
• Creates a tough, new regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.
o Fannie Mae and Freddie Mac own or guarantee $5.2 trillion of residential mortgages – nearly half of all U.S. home mortgages.
• Provides limited, temporary authority to the federal government to aid Fannie Mae and Freddie Mac if needed.
o This authority would expire December 31, 2009.
• In order to protect all Americans, sets minimum standards for mortgage brokers and strengthens the “Truth in Lending Act” (to require better disclosure to borrowers before they sign a mortgage).
• Includes mortgage protections for servicemembers and veterans, such as lengthening the time a lender must wait before staring foreclosure proceedings from three months to nine months after a soldier returns from service.
• Grants $10 billion in additional bond authority that states could use to provide loans to first-time homebuyers or to finance the construction of affordable rental housing.
• Provides an additional $150 million for foreclosure prevention counseling.
The Housing bill (H.R. 3221) passed the Senate by a vote of 72 to 13.