Before I take note of a couple of votes from last week’s Area Votes in Congress writeup in the Philadelphia Inquirer, let’s “set the wayback” for January 2004 and check out this USA Today story…
In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.Uh huh, sure…
In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the "most significant FHA initiative in more than a decade." It would lead to 150,000 first-time owners annually, he said.
Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush's proposed change would extend the nothing-down option to borrowers with blemished credit.
FHA loans carry higher risks of delinquency and foreclosure than do private mortgages, and the proposed change presumably will lead to greater losses to the government than the current program does.
Weicher said the added risk will be offset by higher fees charged to borrowers who opt to make no down payment.
And with this in mind, I present the following from the week ending 3/13…
HouseI think the following should be noted about these votes from here…
FHA refinance program. Voting 256-171, the House passed a Republican bill (HR 830) to repeal a six-month-old initiative known as the FHA Refinance Program. The program is designed to help homeowners who owe more on their mortgage than their house is worth, who are current in their loan payments, and whose loans are not insured by the Federal Housing Administration.
A yes vote was to pass the bill.
Voting yes: John Carney (D., Del.), Charles W. Dent (R., Pa.), Michael Fitzpatrick (R., Pa.), Jim Gerlach (R., Pa.), Frank A. LoBiondo (R., N.J.), Pat Meehan (R., Pa.), Joseph R. Pitts (R., Pa.), Jon Runyan (R., N.J.), and Christopher H. Smith (R., N.J.).
Voting no: Robert E. Andrews (D., N.J.), Robert A. Brady (D., Pa.), Chaka Fattah (D., Pa.), Tim Holden (D., Pa.), and Allyson Y. Schwartz (D., Pa.).
Jobless homeowners. Voting 242-177, the House passed a bill (HR 836) to repeal the Emergency Mortgage Relief Program, which is designed to help homeowners who have lost their jobs meet mortgage obligations and keep their homes. The assistance is available for up two years to those who have fallen behind in mortgage payments due to loss of work or a serious medical condition.
A yes vote was to pass the bill.
Voting yes: Dent, Gerlach, Fitzpatrick, Holden, LoBiondo, Meehan, Pitts, Runyan, and Smith.
Voting no: Andrews, Brady, Carney, Fattah, and Schwartz.
The first bill, (H.R. 830), calls for closure of the FHA’s Refinance Program, also known as the FHA “Short-Refi”. The program facilitates homeowner refinance of mortgages that are underwater, as long as lenders agree to write-off at least 10 percent of the loan’s original principle amount. Although the program received over $8 billion in financing, only 245 applications have been submitted, and only 44 loans have been approved under the program since September of 2010. The lack of participation and limited effectiveness making the program an easy target for House members eager to enact cost-cutting measures. Some House Democrats have called the move to end the program premature, saying that the program needs to be given time to prove its worth.Also, let it be recorded that “Democrat” John Carney voted for HR 830 and “Democrat” Tim Holden voted for HR 836 (and Mikey The Beloved, of course, sided with those who would throw homeowners facing difficulty into the street in the name of fiscal prudence…and by the way, assuming both of these trash bills make it out of the Senate, Obama has quite rightly said he will veto both...we should be looking at ways to modify mortgage payments for troubled borrowers, which makes better financial sense than throwing them, for the most part, out on their ear; the Repugs continue their laser-like focus on job creation…not!).
The second passed bill, (H.R. 836), seeks to cease funding for the Emergency Mortgage Relief Program (EMRP), which provided for bridge loans of up to $50,000 for unemployed homeowners who found themselves unable to make their monthly mortgage payments. Although authorized for funding of up to $1 billion, the program has yet to even begin, due (according to the FHA Commissioner) to onerous red tape required before the program could be established. With the funds as-of-yet unspent, the program has been deemed fair game for cut, particularly since it only serves to increase the debt-burden of homeowners who are already showing signs of financial difficulty.
If one day it turns out that 30-year fixed-rate FHA mortgages have gone the way of Woolworth’s and Horn and Hardart in this country, it will be because of the road we started down with bills like H.R. 830 in particular, as an attempt at a remedy for a problem that never should have arisen in the first place (as I’ve said in the past, agencies of government like the FHA and GSEs like Fannie and Freddie all worked fine until the Bush crowd was installed by the Supreme Court in 2000).
This week, the GOP-run House took up repeals of Democratic-written laws on housing foreclosures and debated a war-powers resolution. Both chambers considered stopgap spending to avert a government shutdown.