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I personally have read over the preliminary details of the 106 page Wall Street Bailout Bill, called the Emergency Economic Stabilization Act of 2008 and I am disappointed to say the least. This was the most significant federal intervention in the economy since the Great Depression and a golden opportunity to develop a loan modification program that would get the mortgage industry to systematically modify these toxic loans to make them affordable for struggling homeowners.
Yet, our congress has failed to include real foreclosure protection in this bill for homeowners on Main Street.
I am really trying to be positive for my readers and the homeowners coming to my blog for help and hope. Looking for a glimmer of hope, I read the proposed bill over and over. But, I am too much of a realist and I have to cut through the BS and give it to all like it is.
Unfortunately, this tenative bill offers little substance in the help department for Main Street and does litttle to ensure homeowners stay in their homes.
Contact your state’s senator by clicking this link ASAP and let them know what you think.
(b) COORDINATION.
The Secretary shall coordinate with the Corporation, the Board (with respect to any mortgage or mortgage-backed securities or pool of securities held, owned, or controlled by or on behalf of a Federal reserve bank), the Federal Housing Finance Agency, the Secretary of Housing and Urban Development, and other Federal Government entities that hold troubled assets to attempt to identify opportunities for the acquisition of classes of troubled assets that will improve the ability of the Secretary to improve the loan modification and restructuring process and, where permissible, to permit bona fide tenants who are current on their rent to remain in their homes under the terms of the lease. In the case of a mortgage on a residential rental property, the plan required under this section shall include protecting Federal, State, and local rental subsidies and protections, and ensuring any modification takes into account the need for operating funds to maintain decent and safe conditions at the property.
CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS.
Upon any request arising under existing investment contracts, the Secretary shall consent, where appropriate, and considering net present value to the taxpayer, to reasonable requests for loss mitigation measures, including term extensions, rate eductions, principal write downs, increases in the proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications.
ASSISTANCE TO HOMEOWNERS AND LOCALITIES.
DEFINITIONS.—As used in this section— (1) the term ‘‘Federal property manager’’ means the Federal Housing Finance Agency, in its capacity as conservator of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation; (B) the Corporation, with respect to residential mortgage loans and mortgage-backed securities held by any bridge depository institution pursuant to section 11(n) of the Federal Deposit Insurance Act; and (C) the Board, with respect to any mortgage or mortgage-backed securities or pool of securities held, owned, or controlled by or on behalf of a Federal reserve bank; (2) the term ‘‘consumer’’ has the same meaning as in section 103 of the Truth in Lending Act (15 16 U.S.C. 1602); (3) the term ‘‘insured depository institution’’ has the same meaning as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and (4) the term ‘‘servicer’’ has the same meaning as in section 6(i)(2) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(i)(2)).
HOMEOWNER ASSISTANCE BY AGENCIES.
IN GENERAL.—To the extent that the Federal property manager holds, owns, or controls mortgages, mortgage backed securities, and other assets secured by residential real estate, including multi family housing, the Federal property manager shall implement a plan that seeks to maximize assistance for homeowners and use their authority to encourage the servicers of the underlying mortgages, and considering net present value to the taxpayer, to take advantage of the HOPE for Homeowners Program under section 257 of the National Housing Act or other available programs to minimize foreclosures.
MODIFICATIONS.—In the case of a residential mortgage loan, modifications made under paragraph (1) may include— 14 (A) reduction in interest rates; 15 (B) reduction of loan principal; and 16 (C) other similar modifications.
TENANT PROTECTIONS.—In the case of mortgages on residential rental properties, modifications made under paragraph (1) shall ensure— 20 (A) the continuation of any existing Federal, State, and local rental subsidies and protections; and that modifications take into account the need for operating funds to maintain decent and safe conditions at the property.
TIMING.—Each Federal property manager shall develop and begin implementation of the plan required by this subsection not later than 60 days after the date of enactment of this Act.
REPORTS TO CONGRESS.—Each Federal property manager shall, 60 days after the date of enactment of this Act and every 30 days thereafter, report to Congress specific information on the number and types of loan modifications made and the number of actual foreclosures occurring during the reporting period in accordance with this section.
CONSULTATION.—In developing the plan required by this subsection, the Federal property managers shall consult with one another and, to the extent possible, utilize consistent approaches to implement the requirements of this subsection.
ACTIONS WITH RESPECT TO SERVICERS.—In any case in which a Federal property manager is not the owner of a residential mortgage loan, but holds an interest in obligations or pools of obligations secured by residential mortgage loans, the Federal property manager shall encourage implementation by the loan servicers of loan modifications developed under subsection (b); and assist in facilitating any such modifications, to the extent possible.
LIMITATION.—The requirements of this section shall not supersede any other duty or requirement imposed on the Federal property managers under otherwise applicable law
