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Senate Reaches Compromise on Funding for Anti-Foreclosure Bill
By kevin | May 16, 2008
The heated debate in the Senate over the proposed anti-foreclosure bill saw a breakthrough yesterday, as Senators agreed to a measure that would have Fannie Mae and Freddie Mac, the two biggest government affiliated mortgage lenders, pay for part of the proposed federal program to insure new loans for homeowners in distress. While the agreement was only preliminary, the Senate was hopeful that it would be enough to schedule a vote on the bill for May 20.
The bill would allow for homeowners at risk of foreclosure to refinance their loans at better, lower rates so that they could keep their homes. The government was at first hesitant about insuring risky loans, but Fannie Mae and Freddie Mac help out alleviated part of those worries. Many feel this compromise will lead to President Bush supporting the measure, instead of vetoing it as he had previously stated was his intention.
The bill, which will allow $300 billion in federally insured loans to homeowners all over the country, is expected to cost taxpayers over $1.7 billion in the next five years.
Many feel the biggest advantage of the loan will be that homeowners in risky adjustable rate mortgages will be able to switch to more stable fixed rate plans, in hopes that this would slow the rising national foreclosure rate.
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Topics: Foreclosure |