Mortgage Rate News

President Bush is promising to veto the current housing relief bill being considered by Congress right now. The bill is in the House of Representatives, and is unlikely to make it further, even if it does pass. The New York Times reports the details of the housing relief bill:

The House is expected to vote on the Frank bill, which would expand access to federally insured mortgages to help troubled homeowners refinance their loans, on Wednesday or Thursday. Under the bill, lenders would be required to reduce the principal balances for borrowers at risk of default. The troubled loans, typically with high, adjustable interest rates, would then be refinanced into more affordable 30-year fix-rate loans insured by the Federal Housing Administration. The new loans would be limited to 90 percent of a property’s value, based on an updated appraisal, and the government would retain a stake in any future sale of the property.

It doesn’t seem that onerous, really. Sure, it does put the taxpayers on the hook, but we’re already on the hook for the JP Morgan and Bear Stearns deal, and that doesn’t help any of the “regular folks.” Besides, I like the idea of limiting the amount of the loans, as well as having the government retain a stake in the property if it sells in the future.

One would hope, thought, that mortgage lenders would take a look at the situation and realize that it is in their best interests (for the most part) to avoid foreclosures and work with borrowers to re-do some of the loan terms. What would be really nice, though, is if mortgage lenders would get together and decide to offer some incentives for homeowners that made wise decisions and didn’t get into trouble…

Tags: mortgage loan blog, housing relief, home mortgage loan, housing relief bill,
second mortgages, mortgage lenders, President Bush