WASHINGTON, D.C. — Today the House of Representatives passed the American Housing Rescue and Foreclosure Prevention Act (H.R. 3221) by a vote of 272 to 152. Representative Xavier Becerra (CA-31), Assistant to the Speaker of the House and the only congressional member from Southern California on the Ways and Means Committee, voted for the bill.
"When one family experiences the trauma of losing their home to foreclosure the impact extends far beyond that one family," Rep. Becerra said. "A single foreclosure can hurt an entire neighborhood, depressing the local economy. This commonsense legislation deals with the immediate crisis while modernizing our federal housing programs to safeguard against future trouble in the mortgage and housing markets."
H.R. 3221 seeks to protect vulnerable families and stabilize home values by providing mortgage refinancing assistance to at least 400,000 families currently in danger of losing their homes through an expanded Federal Housing Administration (FHA) program.
In exchange for an FHA guaranteed mortgage, borrowers must share any profit from the resale of the refinanced home with the government. Only owner-occupied primary residences are eligible.
The bill also provides $4 billion in emergency assistance to communities hardest hit by the foreclosure and sub-prime crisis to purchase foreclosed homes, at a discount, and rehabilitate or redevelop the homes. Rehabilitated homes would then be sold or rented to moderate and modest income families. Any resulting profit would be reinvested in affordable housing and neighborhood stabilization.
Funding is also provided for pre-foreclosure counseling to help families avoid foreclosure.
The legislation strengthens regulation and oversight of Fannie Mae and Freddie Mac by putting a strong independent regulator in place. The new regulator will have enhanced authority to raise capital standards, set strong prudential standards, and enforce these new standards – including the ability to directly restrict executive compensation.
In addition to helping communities suffering from the foreclosure crisis, H.R. 3221 seeks to make homeownership affordable by providing $15 billion in tax benefits including tax credits for first-time buyers, a property tax deduction for non-itemizers, additional mortgage revenue bonds for states and improved access to modest income housing.
President Bush has indicated he will sign the bill.
Click here to learn more about H.R. 3221.
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