Senator Dick Durbin: Passage Of FHA Bill Will Help Families At Risk Of Losing Homes

December 14, 2007 -- [WASHINGTON, D.C.] – U.S. Senator Dick Durbin (D-IL) hailed the Senate’s passage of legislation overhauling the Federal Housing Administration today, even as he and other lawmakers warned that more needs to be done to combat rising foreclosures and a broader housing crisis. The Senate voted 93-1 in favor of the bill.

“Passing FHA reform may help families who are at risk of losing their homes. But the Senate should not believe that because we passed this bill today our work is done,” said Durbin. “We must do more.”

The legislation passed today will increase the sizes of loans FHA could insure, make counseling more available to homeowners and lower down-payments for borrowers getting an FHA loan. Durbin and other supporters of the bill believe it can help stem the rising tide of foreclosures that have upended credit markets in recent weeks.

The House of Representatives passed its version of the legislation in September, and the White House has said it supports congressional efforts to modernize FHA .If enacted, the legislation would mark the first major piece of legislation passed this year aimed at addressing the problems in the mortgage markets.

Earlier this year, Durbin introduced his own legislation aimed at dealing with the looming foreclosure crisis. Durbin warned that if not addressed, that problem will soon overwhelm too many American families and have a devastating ripple effect on communities and the economy.

“The fact that 2.2 million Americans face foreclosure is not just your neighbor's misfortune, it is a misfortune for your neighborhood, your community and our nation,” said Durbin.

Durbin’s legislation would help families save their homes by:

* Eliminating a provision of the bankruptcy law that prohibits modifications to mortgage loans on the debtor’s primary residence, so that primary mortgages are treated the same as vacation homes and family farms.
* Extending the time frame debtors are allowed for repayment, to support long-term mortgage restructuring.
* Waiving bankruptcy counseling requirements for families whose homes are already scheduled for foreclosure, so that precious time is not lost as families fight to save their homes.

Durbin’s bill would require no new taxpayer funding, would need no new bureaucracy and would leverage market principles to ensure that an optimal solution is reached for each family and its banker.

Durbin’s bill has received broad support from groups which include: AARP; AFL-CIO; Consumer Federation of America; Consumers Union; NAACP; National Association of Consumer Bankruptcy Attorneys; National Council of La Raza; National Fair Housing Alliance; National Urban League and SEIU.

Source: Senator Dick Durbin