Senate Banking Committee Approves Foreclosure Bill
The new Foreclosure Aid bill made some headway in the Senate yesterday, as the Senate Banking Committee voted 19-2 in favor of the bill, the last hurdle now only being the general vote by the Senate. Many expect the bill to pass easily, since talks have gone on for several weeks about the bill and due to pressure to do something about the housing crisis, the Senate managed to strike a bipartisan compromise.
The major debate over the bill has been in how it will be funded, but by now getting Fannie Mae and Freddie Mac to help pay for it, the burden will be eased on the taxpayers, which pleased many. The bill basically allows that roughly 500,000 homeowners nationwide would be eligible to receive federal loan refinancing at lower costs. Most of the homes in danger of foreclosure are now worth much less than the amount of the mortgage they are held under due to falling property values and the housing market crunch.
Lenders would be forced to refinance the loans and take the losses, and homeowners would be required to split any profits on a sale of the home in the future with the government.