Housing Update from Congressman David Price

Below is the email I got from congressman David Price on the new legislation that has been passed recently. Instead of explaining it I thought I would just let you read it yourself and get the details...

Thank you for contacting me regarding efforts to stabilize the nation's housing markets and the foreclosure crisis. I am pleased to hear from you.

Like you, I understand that the housing crisis has damaged the U.S. economy and left far too many families in desperate situations, and I am committed to working with the Obama Administration to restore stability to the housing market and the broader economy. As you may know the Obama Administration recently announced its comprehensive Homeowner Affordability and Stability Plan, which is designed to help 7 to 9 million responsible homeowners who are struggling to make their mortgage payments, restructure or refinance their home loans to avoid foreclosure. The plan provides for refinancing for 4 to 5 million families with mortgages (issued or guaranteed by Freddie Mac and Fannie Mae) who owe more on their house than its current appraised value. In addition, the Homeowner Stability Plan will reach 3 to 4 million at-risk homeowners, with new incentives for lenders to work with borrowers to modify loan terms to bring them more in line with current housing market conditions. Only owner-occupied homes will qualify, and no home mortgages larger than the FHA conforming limit of $729,750 will be eligible. The program is aimed exclusively at homeowners willing to make payments to stay in their home - it will not aid speculators. We know that foreclosed properties reduce surrounding property values, reduce property tax collections, and contribute to increased crime. The foreclosure crisis is having a major detrimental effect on our economy, and stabilizing the housing market is a key component to restoring overall economic growth.

The House recently took action to put in force President Obama's housing plan, by passing the Helping Families Save Their Homes Act (H.R. 1106), with my support. The bill will offer new incentives for lenders to negotiate loan modifications with borrowers, and reduce fees that have discouraged lenders from participating. The bill also allows courts to modify the terms of mortgage loans for families as part of a Chapter 13 bankruptcy repayment plan, in the same manner as owners of vacation homes or multiple houses, real estate speculators, and corporations have been able to do for years. This provision is limited to existing mortgages, requires the homeowner to first work with the lender on restructuring the mortgage terms outside of bankruptcy, and ensures that the lender shares in any increase in property value if the house is sold within five years following the court modification. By setting up a homeowner-lender negotiating process that begins well before bankruptcy, this provision is designed to keep more families out of bankruptcy, and out of foreclosure. The measure is under consideration by the Senate.

In other action aimed at stimulating the economy and stabilizing the housing market, Congress recently enacted, with my support, the American Recovery and Reinvestment Act (H.R. 1), which will save and create 3.5 million jobs, provide 95 percent of American workers an immediate tax cut, increase renewable energy and invest in science and technology. Among its provisions, the bill increases the first-time homebuyer's tax credit to $8,000 on homes purchased between January 1 and December 1, 2009, and removes the current repayment requirement. For 2009, the measure also increases the FHA, Fannie Mae and Freddie Mac loan limits back up to the 2008 levels and gives the Secretary of Housing and Urban Development discretion to set higher limits in subareas. The bill was signed into law (P.L. 111-5) on February 17, 2009.

As the House considers legislation related to the economic recovery and housing during the 111th Congress, I hope you will stay in touch regarding your perspective. Thank you again for contacting me.