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May 21, 2008 - The Senate Banking, Housing and Urban Affairs Committee passed the “Federal Housing Finance Regulatory Reform Act of 2008” on May 20. This legislation includes major efforts to create more affordable housing, to prevent the rising number of foreclosures and to reform the regulation of the government-sponsored enterprises (GSEs). The legislation passed easily in the Senate Banking Committee by a margin of 19 to 2.
This legislation is similar to the “American Housing Rescue and Foreclosure Prevention Act of 2008,” H.R. 3221, which passed in the House on May 8. Both bills include provisions for the Federal Housing Administration (FHA) to insure refinanced loans for struggling homeowners.
The next step for the bill is a vote by the full Senate. However, the President threatened to veto the bill agreed to in the House. The White House is reportedly encouraged by the provisions relating to GSEs in the Senate bill, although it did not indicate that it supported the complete Senate bill.
A noted difference between the bills is the maximum loan size that Fannie Mae and Freddie Mac could buy or guarantee. The House bill includes a figure of $729,750 in areas with high housing costs; the Senate limit is only $550,000.
At a luncheon attended by NASCUS, Rep. Carolyn Maloney, (D, N.Y.) briefly discussed the loan limits issue. She believes that the higher figure presented in the House bill will help more homeowners; especially in states where real estate has become so expensive. She indicated it is an important issue for several of her colleagues representing districts with high housing costs.
NASCUS is reviewing both pieces of legislation and will keep you apprised with any updates.
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