Foreclosure Connections Blog

Expected veto from the White House on foreclosure bills

Barney Frank said to reporters this morning that the House Financial Services Committee is expecting a veto threat from the Bush administration on the $15 billion dollars loan and grant assistance bill. This bill has been approved by the committee yesterday.

Frank also indicated that the white house will also veto the plan to spur the refinancing of distressed mortgages: “The administration, we thought, was moving towards it. … But I was told yesterday now they’re strongly against it.”

The bill approved by Frank would reach some borrowers who otherwise would be ineligible for a government backed mortgage. Borrowers would still have to prove that they could carry on with the payments and lending institutions would have to agree hefty losses on existing loans, but surely that would help many homeowners. Differently from FHASecure, this bill would reach borrowers with bad credit and no payment history.

Frank has been trying hard to get support from Republicans on his plan. He hopes that the bill becomes law this year.

The Deputy Secretary of Housing and Urban Development Roy A. Bernardi called the $15 billion fund “a costly bailout for lenders and speculators”.

FHASecure definitely helps a few homeowners and some investors, but it is unfair that only a few benefit from it. Surely with Frank´s plan a lot more homeowners would be able to avoid foreclosure.