05-14-08

Despite the House passing important legislation last week that would help millions of American homeowners keep their homes the GOP and White house have vowed to fight the bill and Bush has already threatened to veto it. This important bill would allow the FHA to buy the troubled loans at a deep discount from banks and refinance them at a written down value thus passing the monthly savings to the homeowner. Such savings could be very significant and would free up cash flows for already strapped Americans.

The Senate Banking Committee will be reviewing and debating a bill sponsored by Committee Chairman Christopher Dodd on Thursday. This bill much like the one just passed by the House would provide for an FHA backed government refinance program to help aid homeowners in need. One possibility for the bill to pass congress is that the timing falls on a election year which could sway even the way Republicans vote for issues, especially those who represent states with high foreclosures. Congress will take up this issue in June.

Republicans have said they will not approve a plan that acts like a bailout that rewards bad behavior. This is also at odds with the Republican approved bail out for Bear Sterns in the amount of $29 billion, which the government did step in and did bail out that company. In contrast the FHA assistant program to help millions of Americans is only expected to cost $1.7 billion and help millions.

Currently Congress has only 5 weeks left to either approve or postpone the bill further since the 4th of July marks recess for the Congress and not much is likely to get done after that, at least not in a timely fashion.

All this debate is still expected despite the fact that foreclosures are up 112% from this time last year. With such staggering numbers you would expect more intervention from both parties. This is clearly not a party issue as much as it is preserving the American way of life. We urge all homeowners to write to their congress person and representative letting them know how they should be voting on this very important bill.

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