DISTRESSED HOMEOWNERS NEED HELP, BUT SENATE HESITANT TO ACT!
HOMEOWNERS WAIT, AND WAIT, FOR LAWMAKERS TO ACT!
Every day, I check my Foreclosure Databases and find dozens of homeowners in Chicago IL, Cook County, and surrounding areas around Chicago, facing newly-filed foreclosure actions against their homes. For months, in the newspapers and on the web, we've all been reading stories and hearing rhetoric about lawmakers wanting to pass legislation to help these distressed homeowners.
Today, I spotted a relevant article in The Chicago Tribune, written by reporter Kenneth R. Harney, Washington Post Writers Group.
Just before the Thanksgiving holiday recess, the House passed several sweeping mortgage reforms, with bipartisan support. However, laws that would bolster mortgage programs offered by the Federal Housing Administration (FHA), and make it easier for adjustable-rate borrowers whose loans are about to reset at a higher interest rate, to refinance their potentially high-cost loans into more affordable payment programs, have been slowed in the U.S. Senate.
If approved and ratified, new legislation would provide the following -
Require every U.S. Loan Originator to be properly licensed and certified, and listed in a centralized database.
Require minimum educational and testing standards for professional Loan Originators.
Require all loans to offer "fair and appropriate" standards.
Ban "steering" of borrowers into higher-cost loan programs than their individual credit scores and histories would suggest.
Increase legal culpability to Wall Street Firms that pool predatory loans into bonds.
Improve appraisal oversight to eliminate inflating of property valuations.
The bill would also raise lending ceilings on FHA mortgages, reduce minimum required down payments, and allow the FHA to assess Mortgage Insurance Payments based on individual credit status of those applying for the loan, rather than simply in aggregate.
The Mortgage Reforms were passed by the U.S. House in September, 2007, then approved by the Senate Banking Committee by a 20-1 vote. But legislation was blocked on the floor of the U.S. Senate by a group of Republicans who oppose federal over-involvement in the Mortgage Market. Senate opponents include Elizabeth Dole (R-NC), Tom Coburn (R-OK), and James DeMint (R-SC). Dole felt the FHA's plan to price mortgages based on credit score and history would allow the agency to unfairly compete in the Mortgage Insurance industry. The other two Senators simply feel more time is needed to consider the legislation.
Senate Banking Committee Chairman Christopher Dodd (D-CT) has promised to introduce mortgage reform quickly, but has yet to act.
Most Congressmen agree that the Boom Real Estate Market of 2001-2005 adversely affected those acquiring many types of mortgage, but especially those with challenged credit seeking sub-prime loans. Many of these lenders have gone out of business, and the borrowers have been left holding the bag, and in danger of losing their homes.
However, quick action from lawmakers, despite promises, appears unlikely.
For DEAN'S TEAM CHICAGO.
DEAN MOSS
