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Information on the Foreclosure/Housing Crisis

Contents of this Page

Background Information
Pending Legislation
Proposals Targeted to Rural Housing

Background Information

Pending Legislation

Numerous bills have been introduced, and not all of them are summarized here. HAC will update this site periodically, but events are moving fast. For text of bills and updates, visit:

  • http://thomas.loc.gov
  • House Financial Services Committee website
  • House Ways and Means Committee website
  • Senate Banking Committee website
  • Senate Finance Committee website

    • For Bush Administration positions on some of these measures, visit the Office of Management and Budget website.

    Update May 15, 2008. The Senate Committee on Banking, Housing, and Urban Affairs was expected to meet in closed session today to consider “The Federal Housing Finance Regulatory Reform Act of 2008.” According to the Committee's website, the bill "includes major efforts to help prevent the rising number of foreclosures and to reform the regulation of the government-sponsored enterprises (GSEs) in order to improve their role in the housing finance system."

    Update May 9, 2008. The House on May 8 passed a comprehensive housing package of several bills. The White House has threatened a veto. Passed as a series of three complex amendments to a Senate bill, H.R. 3221 draws together several other bills:

    • H.R. 5830, the FHA Housing Stabilization and Homeownership Retention Act, which would provide FHA loans for some owners facing foreclosure and new counseling funds.
    • H.R. 1852, an FHA modernization bill, and H.R. 1427, for regulatory reform of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.
    • H.R. 5579, the Emergency Mortgage Loan Modification Act, protecting loan servicers that modify mortgages to avoid foreclosures.
    • H.R. 5720, providing tax credits for first-time homebuyers, a real estate tax deduction for non-itemizers, additional mortgage revenue bonds, and foreclosure protections for returning soldiers.

    The legislation now moves back to the Senate, which passed a very different H.R. 3221 on April 10.

    Also on May 8 the House passed H.R. 5818, the Neighborhood Stabilization Act of 2008, providing $15 billion in grants and loans to states to handle foreclosed properties. The White House also is threatening to veto it.

    More information is available at the House Financial Services Committee's website.

    Update April 28, 2008. On April 24 the House Financial Services Committee did not complete its review of H.R. 5830, the FHA Housing Stabilization and Homeownership Retention Act of 2008, which would provide FHA loans for some owners facing foreclosure, and H.R. 5829, the Public Housing Asset Management Improvement Act of 2008. The committee's markup is scheduled to continue on April 30 and May 1. The committee's sessions can be viewed live online on its website.

    Update April 24, 2008. The House Financial Services Committee is moving forward on legislation based on Rep. Barney Frank's recent proposals. On April 23 the committee passed H.R. 5818, the Neighborhood Stabilizaton Act of 2008, which would provide grants and loans to states to handle foreclosed properties; and H.R. 5579, the Emergency Mortgage Loan Modification Act of 2008, protecting loan servicers that modify mortgages to avoid foreclosure. On April 24 the committee is considering H.R. 5830, the FHA Housing Stabilization and Homeownership Retention Act of 2008, which would provide FHA loans for some owners facing foreclosure; and H.R. 5829, the Public Housing Asset Management Improvement Act of 2008.

    Update April 11, 2008. On April 10 the Senate passed the bill described below, 84-12. It reduced the CDBG amount to $3.92 billion and increased the counseling funding level to $180 million. The Senate Finance Committee's press release is available at http://finance.senate.gov/press/Bpress/2008press/prb0410208a.pdf.

    As of April 8, 2008:

    • The Senate continues work this week on legislation introduced by Sens. Christopher Dodd (D-Connecticut) and Richard Shelby (R-Alabama) to help address the mortgage crisis. Final details may change, but the package as proposed would expand the HUD Federal Housing Administration (FHA) loan limit, provide $4 billion in Community Development Block Grant (CDBG) funds to buy and rehab foreclosed homes, provide $100 million in additional counseling funds through NeighborWorks® America, allow non-itemizing taxpayers to take a deduction if they pay property taxes, provide help to veterans facing foreclosure, expand consumer protections under the Truth in Lending Act, and provide tax breaks to homebuilders and others and tax credits to buyers of foreclosed homes. Despite strong bipartisan support in the Senate, the White House is threatening a veto. (This bill is not numbered because it was introduced as an amendment to another bill. To find its text, go to http://thomas.loc.gov/home/r110query.html and search for "FHA Modernization Act of 2008" - include the quotation marks in your search.)
    • The House Financial Services Committee holds hearings April 9 and 10 on legislation proposed by Rep. Barney Frank (D-Massachusetts). His bill (not yet introduced) would allow FHA to guarantee up to $300 billion in refinanced mortgages that have been written down by lenders. The bill also would allow FHA to create a facility to refinance loans in bulk. And the bill would provide $10 billion in loans and grants from the Treasury Department to states for the purchase, rehab and prompt occupancy of vacant, foreclosed homes.
    • Rep. Maxine Waters (D-California) on April 2 introduced H.R. 5678. It would provide $10 billion in CDBG funds to redevelop foreclosed, vacant homes.

    Proposals Targeted to Rural Housing

    • Responding to a House Financial Services Committee request for comments on Rep. Frank's proposal, HAC suggested that in rural areas intense marketing efforts would be advisable, and supported a National Rural Housing Coalition recommendation to use Section 502 loans for owners and Section 533 grants for nonprofits as well as FHA loans.
    • The National Rural Housing Coalition recommended adding two provisions to Rep. Frank's proposal :
      • Add $100 million for the Section 502 direct program with changes in refinancing policy. Section 502 direct home ownership loans are available to low- and moderate-income households. Under current policy, refinancing is limit to repairs, cases in which the borrower owns the land, and unexpected emergencies such as major medical expenses, not a reset in mortgage rate. Recommendation: change the policy to allow refinancing of existing mortgages. Increase income limit to 100% of median and population limit to 25,000 outside urbanizing areas.
      • Add $50 million for Section 533 Housing Preservation Grants to finance a rural REO program. Section 533 grants are made to nonprofit organization that can use the funds to finance the rehabilitation of single- and multifamily housing. The statute will need an amendment to allow a grantee to acquire properties with grant funds and then rehab and sell or rent them to low- and moderate-income households.

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    Posted: April 9, 2008
    Most recent update: April 24, 2008

    If you have problems accessing any of the material on this page, or if you would like to suggest additional information to include, contact Leslie Strauss at HAC, leslie@ruralhome.org, 202-842-8600.