Senate Aims to Overhaul Troubled Foreclosure Prevention Program
source: http://www.washingtonpost.com/wp-dyn/content/article/2009/05/06/AR2009050603414.html?wprss=r...
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The Senate on Wedsneday approved a housing bill aimed at addressing the country's growing foreclosure problem, including revamping a troubled government foreclosure prevention program.
The bill passed 91-5 after an amendment to allow bankruptcy judges to modify mortgages, known as "cramdown," was stripped from the legislation last week. That measure was fiercely opposed by the financial services industry, which complained it would raise costs.
"This bill will equip homeowners and lenders with new and improved tools to combat foreclosures, and it will ensure that the tools are easier to use," said Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee, who sponsored the bill. "While this bill is not a cure-all for our nation's economic troubles, it makes important contributions towards the protection of American homeownership and a healthier banking system."
The legislation must be reconciled with a House version passed more than a month ago. Among other measures, the bill includes an overhaul of the government's Hope for Homeowners program. That program was supposed to refinance troubled homeowners into easier to handle loans, but has reached few people.
The approval process for the program is streamlined under the legislation and the Department of Housing and Urban Development is given more flexibility to administer it.
The bill also includes a measure to shield mortgage servicers, which maintain pools of loans for lenders or investors, from lawsuits for modifying a loan. That measure is opposed by a coalition of investors that have argued it unnecessarily protects the servicers from unrelated misdeeds.
The bill passed 91-5 after an amendment to allow bankruptcy judges to modify mortgages, known as "cramdown," was stripped from the legislation last week. That measure was fiercely opposed by the financial services industry, which complained it would raise costs.
"This bill will equip homeowners and lenders with new and improved tools to combat foreclosures, and it will ensure that the tools are easier to use," said Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee, who sponsored the bill. "While this bill is not a cure-all for our nation's economic troubles, it makes important contributions towards the protection of American homeownership and a healthier banking system."
The legislation must be reconciled with a House version passed more than a month ago. Among other measures, the bill includes an overhaul of the government's Hope for Homeowners program. That program was supposed to refinance troubled homeowners into easier to handle loans, but has reached few people.
The approval process for the program is streamlined under the legislation and the Department of Housing and Urban Development is given more flexibility to administer it.
The bill also includes a measure to shield mortgage servicers, which maintain pools of loans for lenders or investors, from lawsuits for modifying a loan. That measure is opposed by a coalition of investors that have argued it unnecessarily protects the servicers from unrelated misdeeds.
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