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House committee votes 'yes' on housing assistance bill
WASHINGTON (5/2/08)—With a 46-21 vote, the House Financial Services Committee Thursday approved the FHA Housing and Homeowner Retention Act (H.R. 5830).
The bill, first announced by the committee's chairman, Rep. Barney Frank (D-Mass.) in March, proposes to expand the Department of Housing and Urban Development's FHA program to help refinance at-risk borrowers into viable mortgages.
H.R. 5830 would provide funding for the refinancing of up to $300 billion in existing mortgages that are considered foreclosure risks. It would also require the Federal Reserve Board to conduct a study on the need for an auction or bulk refinancing mechanism.
Frank issued the following statement after the vote: "It is important that we reduce the number of foreclosures both as a matter of alleviating the pain for some individuals and stabilizing some neighborhoods. It is my hope that this legislation will restore some stability to the housing market, put liquidity back in the market, and not interfere with the market, but help restore it.
"Servicers should put a pause in some foreclosures until they can wait to see exact details of this as it moves forward. If after this we continue to get very little participation by servicers, I can guarantee you that the servicer industry will look very different a year from now than they do today. If after everything we do in this cooperative way falls short, then you are going to see legislation that puts some very real restrictions on the role of servicers and give many more rights to the borrowers."
The bill is expected to go to a vote on the House floor next week.
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