Democrats Say Lenders Are Falling Short

October 2, 2009

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Four U.S. Democrats introduced legislation on Wednesday that would slow record high foreclosure rates and stabilize the housing market.

“This bill will force lenders to modify qualified mortgages, create a homeowners assistance program and give states a bigger role in mediation efforts, says Senator Dick Durbin (D), adding, voluntary efforts to keep families in their homes have failed”.

The bill titled, “Preserving Homes and Communities Act of 2009″, will apply stronger guidelines and rules for lenders and provide $6.3 billion in funding to states for homeowner grants and subsidized loans.  PCHA of 2009 will also provide $80 million in federal matching funds for states to create mandatory mediation programs.

$1 billion in funds will be issued for building, preservation and rehabilitation of affordable housing.  In order to develop a single data base to better monitor the mortgage market, another $5 million was authorized.

The four U.S. Senators involved in this bill are, Chief Sponsor, Jack Reed (D), Dick Durbin (D), Sheldon Whitehouse (D), Jeff Merkley (D).

This is another step toward rescuing a housing market that is still projected to decline over the next year and some reports say even beyond that.  Second quarter numbers show that home foreclosures in process and delinquent mortgages growing.

Foreclosures rose by 16% to 2.9% of serviced mortgages.  Mortgages delinquencies between 30 and 60 days are now at 10.9%, while the number of mortgages delinquent by 90 days increased by 11.5%.  The inventory of homes available on the market far outweighs the demand for homes.  The legislation proposed will force banks to address the problem of inventory.  The inventory that already exist and the inventory of homes that are currently held captive in foreclosure purgatory.

Related posts:

  1. Citigroup Agrees To Foreclosure Prevention Plan
  2. More Mortgage Woes Ahead
  3. Lenders Resist Making Home Affordable
  4. Unemployed Homeowners Might Receive Assistance
  5. FTC Proposes Up-Front Fee Ban for Mortgage Modifications

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