Foreclosure Prevention Act of 2008- Dissension Slows Progress

Foreclosure Prevention Act of 2008 has turned into a boondoggle. Introduced July 30 2007 it has been revised, debated, revised again. The feel good bill has been juggled more than most volley balls. The bandwagon seems to have missed a gear on a steep grade.

Senators Dodd and Conrad have been identified as “friends of Mozilla”. Their V.I.P. status and preferred rates from Countrywide was a drop in the bucket. Significantly, it did help reduce their monthly mortgage payments. However, I have to wonder if Country and Mozilla were not under such close scrutiny would those two trees stand out in the forest of senators and representatives? Some others may have received preferential treatment from mortgage lenders that also lost money during the subprime crisis and resultant credit crunch.

Senator Ensign is blocking its progress because an $8 billion package of renewable energy tax breaks are not included in the vote. Another article cited greenhouse gas emissions with the Foreclosure Prevention Act. I’m not sure whether that has to do with renewable energy incentives or just something that can be added.

Black leaders are concerned that “Seller paid down payments” are not eligible for FHA mortgages. Well, duh! That is just a way to overprice the home. It is part of the deceit that fueled the inflation of property values. If the house is selling for $100,000 and the seller is “making the down payment”, then mathematically, isn’t the house selling for $95,000. The buyer still doesn’t have a horse in the race unless they are willing and able to commit their own hard-earned money into the endeavor and qualify financially for a mortgage.

Minorities and municipalities are concerned about inner city problems. They want government assistance to make repairs, get the houses occupied, and try to get on with business as usual. One major problem is wasted manpower of the city patrolling and protecting neighborhoods with too many unoccupied houses. It is a “Catch-22, when the cities increase patrols local citizens complain that they are targeted. If patrols decrease, they complain they are not being protected.

Unoccupied houses attract vandals, squatters, and arsonists. Overgrown lawns, standing water in swimming pools, and general lack of maintenance contribute to vermin infestations and health problems for neighbors. Electrical wiring and copper plumbing necessary to habitation are being stripped from houses and sold to metal recycling yards.

The House and Senate still can not agree on the ceiling of FHA mortgages. Should it be $625,000 or $730,000? There are too many lower priced homes endangered by foreclosure at this time to tie up excessive FHA assets on such high priced homes. Theoretically, houses in that price range should not need subprime mortgages or backing by FHA.

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