05-16-08

Christopher Dodd's housing bill is currently being debated int he Senate is is expected to pass as soon as next week now. The bill would create an FHA program that would allow homeowners facing foreclosure to refinance into a low fixed rate provided by an FHA approved lender. The program would work by allowing the current holder of the mortgage to write down the total amount owed and then allowing this FHA program to refinance that lower amount. This would result in significant monthly savings for homeowners.

This legislation will also increase regulation over Fannie Mae and Freddie Mac two government backed companies that buy mortgages and package them into mortgage back securities for sale on the open market. They have helped to lessen the affects of the crisis but do remain defiant and do not want to give up any control even to the government.

Republicans still remain resistant to help for homeowners however it is believe that added pressure from this election year will convince them to vote with Democrats and not against them. This is still unknown and can still be defeated by filibuster or veto if the Republicans wish and if this Democratic sponsored bill does not get enough votes. We expect to see this bill go up for a vote next week.

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