Today: House to Vote on FHA Housing Rescue Bill

Well, to day is the DAY.

At long last, the House of Representatives is going to be discussing and voting on the American Housing Rescue and Foreclosure Prevention Act of 2008.

This Bill has been passed by the Senate, and now needs to pass the House. If there are any changes in the Bill then there will be joint committee meetings to work out differences - then back to House and Senate for a final vote - with no changes - not even a word.

If all goes well, the bill will land with a loud thump on the President's desk - (after a year and half and multitudinous changes including the addition of the recent bailout of FNMA and FHLMC) - for his approval or veto (which he has been threatening off and on for some months). However, in all the months of work on this Bill, it has been supported overwhelmingly by a bipartisan vote in both Houses.

Once the President signs the bill, it will take HUD/FHA 30-60 days to implement the changes in both forward and the Reverse Mortgage, which is the interest of this website.

The changes to be made to the Reverse Mortage are shown, on this website, in yesterday's posting of: Report: Progress of American Housing & Foreclosure Act.

For anyone interested, the developments can be watched, today, on CSPAN (Channel 23 on Comcast in the No. Virginia area). The House will be in session all day from 10:oo am to 1:00 pm, and 1:00 pm - 5:00 pm, and an evening session from 5:00 pm to 10:00 pm. (as shown on the channel itself). You may also keep tabs by watching for "Breaking News" on any major TV station.

Below is today's article from "Politico", by David Rogers, which lays out much of the details of the Bill and political positions.

Gloria



Showdown looms for housing rescue
By: David Rogers July 23, 2008 07:46 AM EST

A landmark housing bill heads to the House floor Wednesday, after final agreements to raise the loan limits in high-cost counties and to adjust the federal debt ceiling to give the Treasury Department more leeway in dealing with the mortgage finance crisis.

The debt limit would be raised by $800 billion under the compromise, which gives Treasury Secretary Henry Paulson broad standby authority to extend credit to or even invest in troubled mortgage giants Freddie Mac and Fannie Mae. Paulson has resisted lawmakers’ demands for some cap on future expenditures to help Fannie and Freddie, and the final debt limit arrangement is designed to placate Congress and still give Paulson the flexibility he wants in order to shore up the markets.

From a taxpayer’s standpoint, the end result can be dizzying at a time when the White House’s new budget estimates show next year’s deficit already approaching $490 billion. And by any measure, the bill represents a huge roll of the dice, committing unprecedented government resources to try to help homeowners and the mortgage finance industry ride out the current correction in housing prices that have shaken the U.S. economy.

The decision to include the debt ceiling provision makes it that much harder for President Bush to not sign the housing bill, after earlier veto threats. But House Republicans warned of large-scale defections Tuesday night in their own rank and file because of billions included by Democrats for low-income housing and urban areas experiencing foreclosures.

Republicans in the Senate, which could take up the bill this week also, appear more supportive.“It’s a huge number and an overwhelming number,” Sen. Judd Gregg (R-N.H.) told Politico. “The only thing worse is if the financial systems melt down.”
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The underlying housing bill authorizes up to $300 billion in new loan guarantees for the Federal Housing Administration to help at-risk homeowners refinance and avoid foreclosure. On top of this, the Congressional Budget Office estimated Tuesday that Paulson’s Freddie-Fannie rescue plan could cost as much as $25 billion over the next two years. And the addition now of an $800 billion debt ceiling increase is a reminder of Washington’s own troubled mortgage, already hovering near $9.5 trillion.

Paulson is hoping that he will never have to use his Freddie-Fannie standby authority, which would expire in any case at the end of 2009. And CBO acknowledged that there is at least a 50 percent chance that that will be the case.

But in making its estimates, the budget office predicted there is a 5 percent chance that the cost could be as high as $100 billion, and it clearly felt uncomfortable accepting the notion that there will be no cost to the taxpayer. The debt ceiling enters the picture because Paulson had hoped to operate outside its boundaries, but that was too much for many top Democrats.

There was general agreement that the current ceiling of about $9.815 trillion would be a problem since it would soon be exhausted this fall because of government expenditures. And the compromise now conforms with the congressional budget plan for 2009, which raises the ceiling to $10.615 trillion — an $800 billion increase.

The House has raised the ceiling already as part of approving the budget. But the Senate has yet to give its approval, and the housing bill is then a quick way to resolve this before November. “We are including it because it has to be done independent of this bill,” said House Financial Services Committee Chairman Barney Frank (D-Mass.). “Independent of raising it, we are saying that any expenditure under the standby authority is subject to it.”

All this comes at a time when the White House budget office is preparing a midsession review to be released next week and showing a worsening deficit picture for 2009. While revenue has held more than many predicted for 2008, officials told Politico that the deficit for 2009 is now projected to approach $490 billion — without counting the full annual cost of military operations in Iraq and Afghanistan.

Frank met Tuesday night with deficit-conscious Blue Dog Democrats in his party caucus, but there is a growing sense in both parties that they can’t back away at this juncture given the fragile economy.

Paulson, who attended a Senate Republican luncheon at the Capitol on Tuesday, carries considerable credibility as a veteran investment banker. And powerful lobbies have begun to line up behind the legislation. For example, the Mortgage Bankers Association sent a letter to House and Senate leaders urging action this month, and the National Association of Realtors, a lobbying heavyweight with 1.2 million members, also praised the Fannie-Freddie rescue plan.

Paulson has argued that Washington must act because the housing crisis is so central to the larger problems facing the economy. Speaking in New York on Tuesday, he estimated that more than $3 trillion of the debt and mortgage securities guarantees issued by Fannie and Freddie are “held by domestic financial institutions including commercial banks, savings and loans, and credit unions, and over $1.5 trillion is held by institutions and central banks overseas.”

At the same time, the two government-supported enterprises are “the largest sources of mortgage finance in the United States,” Paulson said. “Their continued activity is central to the speed with which we emerge from this housing correction and remove the underlying uncertainty in our financial markets and financial institutions.”

Fannie and Freddie’s importance to the secondary mortgage market has also set up a House-Senate regional competition over how far the government can go in the high-end mortgage market, which is crucial to states such as California. Senators had insisted on a cap of $625,000 or the median price in a market, whichever was lower.

The final compromise, Frank said, allows 115 percent of the median price — or 15 percent more than the Senate proposed. The $625,000 cap will remain, but executive agencies will be given discretion to raise it by as much as $100,000 under prescribed market conditions.

© 2008 Capitol News Company, LLC