Under the new housing bill, the government will back new and cheaper loans for homeowners facing foreclosure because of rising mortgage payments.
The bill includes:
- $300 billion in federal aid, including promises to prop up mortgage giants /*Fannie Mae*/ and /*Freddie Mac*/
- $15 billion in housing tax breaks, including a tax credit of $7,500 for first time home buyers
- $3.9 billion in grants to local governments to buy abandoned housing
Pleasanton Congressman Jerry McNerney's 11th Congressional District includes areas of the Central Valley hard hit by the mortgage crisis.
"You know these people are distressed; they're in tears, they're losing their homes, all of their life savings," McNerney said.
He sponsored provisions to raise conforming loan amounts from $360,000 to $625,000 and make it easier for veterans to borrow.
"A lot of veterans that might be facing problems will now be able to get loans within the V.A. which are good, solid loans that will let them stay in their housing," McNerney said.
But even as Congress acts, the mortgage crisis is outpacing the effort. Three million borrowers across the country are facing foreclosure; analysts predict another million will fall behind in the coming year, as home prices continue to fall.
"The best part of this bill is that it will help some borrowers who are on the verge of losing their homes," housing analyst Larry Hynson said. "Also too it will relieve eyesores that are plaguing neighborhoods in terms of foreclosed properties."
Hynson is an analyst with the Association of Community Organizations for Reform Now, the nation's largest nonprofit advocacy organization working to help families keep their homes. He said the housing bill is long overdue, and the worst part is, it is not nearly enough.
Democrats did propose a bill, 15 months ago, Speaker of the House Nancy Polosi said Wednesday.
"But we couldn't get cooperation to have it become the law of the land," Pelosi said. "Not until now."