$15 B Housing Bill Approved by House Panel
Despite objections from the Republicans, the Democrats managed to push a housing bill that is worth $15 billion. The opposition considered the bill to be a government giveaway or bailout.
If passed, the housing bill will mean that counties and cities suffering from the worst of the foreclosure crisis will receive federal grants and loans for the purchase and repair of foreclosure properties.
According to the Democrats, the housing bill could prevent distressed neighborhoods from suffering more from the subprime meltdown. Basically, the program will help millions of troubled homeowners by giving them an opportunity to refinance their existing loan to a much more affordable, government-backed loan.
States with high foreclosures rate will obviously be given priority. In the cities, counties and smaller towns, neighborhoods belonging to the low and middle income class will be given priority as well. Even families who have already lost their homes to foreclosure are targeted by the program.
For the Republicans, such bill is too expensive to be even considered. In addition, the ones who will benefit most from this program are the lenders who currently own large inventories of foreclosed properties. Instead of addressing the real housing concerns, the bill might even make things worse than they already are.
Fortunately, not every provision in the said bill is being vetoed by the Republicans. In fact, a provision, which expands the FHA so that it could help distressed homeowners who could not meet the requirements for government-backed mortgages refinance into a more affordable fixed-rate housing loan, is most likely to get nods from the Republicans.
The said housing bill will be getting a committee vote by next week. Meanwhile another bill was approved by the Financial Services panel at the same time. Under the said bill, lenders are encouraged to assist troubled mortgage borrowers transition to cheaper mortgages.
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