WASHINGTON (3/20/08)—The House Financial Services Committee Tuesday announced an April 9 hearing on the economic, mortgage and housing rescue plan announced last week by that committee’s chairman, Rep. Barney Frank (D-Mass.). Witnesses will include federal regulators, academics, economists and representatives of cities and communities that are being impacted by high numbers of foreclosures, according the committee’s announcement. The proposal, unveiled March 13 by Frank and Senate Banking Committee Chairman Christopher Dodd (D-Conn.) at a joint conference, seeks to address the rising tide of mortgage foreclosures. According to the release, the three main portions of the plan would:
* Permit the Federal Housing Authority (FHA) to provide [up to $300 billion] in new guarantees that would help to refinance at-risk borrowers into viable mortgages. In exchange for the agreeing to a substantial write-down of principal, the existing lender or mortgage holder would receive a short payment from the proceeds of a new FHA guaranteed loan if the restructured loan would result in terms that the borrower can reasonably be expected to pay: * Permit the loan program to be used to refinance and guarantee mortgages through a facility that would provide for auction or other mechanism to refinance loans on a bulk basis; and * Provide $10 billion in loans and grants for the purchase and rehabilitation of vacant, foreclosed homes with the goal of occupying them as soon as possible.
Use the resource link below to read Frank’s announcement of the rescue plan.