The housing legislation provides for increased loan limits for manufactured housing for low and moderate income homebuyers.  In an attempt to prevent or forestall mortgage foreclosures, the bill provides for credit counseling, home mortgage counseling, or any counseling deemed appropriate.

   The mortgage foreclosure protection for servicemen extends the period of time prior to foreclosure of the mortgage from 90 days to nine months.  The stay of proceedings is also extended to nine months.  This provision will expire December 31, 2010.

   Under the Emergency Asistance Redevelopment for Abandoned and Foreclosed Homes section of the bill, a total of $4,000,000.000 will be made available until expended to states and local governments for redevelopment of abandoned and foreclosed homes.

   The Secretary of the Department of Housing and Urban Development will construct  a funding formula within 60 days of enactment of the bill.  Most of funds will go to low and moderate income metropolitan areas or areas deemed the areas of greatest need.  This may be the areas with the highest subprime mortage related loans and/or the highest foreclosure rates.

   A funding mechanism will be established so that these homes can be purchased to sell, rent, or redevelop.  Blighted areas will be demolished.  All properties purchased must be purchased at a discount to the appraised value.

     Additionally, $30,000,000 will be set aside for neighborhood reinvestment for the 100 metropolitan areas which are suffering the most from foreclosures. 

      The Mortgage Disclosure Improvement Act, also known as Truth in Lending, provides that full disclosure be made and that warnings be made to homeowners by lenders about foreclosure rescue scams.  Lenders must send the notices to homeowners who are deliquent by two months in their payments. The notice must contain the following statement in 14 point bold type in both Spanish and English:

    “Mortgage foreclosure is a complex process.  Some people may approach you about  saving your home.  You should be careful about any such promises.  There are government and non profit agencies you may contact for helpful information about the foreclosure process.  Contact your lender immediately at —-, call the Department of Housing and Urban Development Housing Counseling Line at (800) 569-4287 to find a housing counseling agency certified by the Department to assist you in avoiding foreclosure, or visit the Department’s Tips for Avoiding Foreclosure website at http://www.hud.gov/foreclosure for additonal assistance.”

   Any homeowner signing a contract with a foreclosure rescue person or company has a three day right of recission. 

     Veterans disabled before discharge or release who must move because of a foreclsoure of a rental property can have their move paid for by the government. 

   The approximate 700 page housing bill constains provisions for housing tax incentives , low income housing tax credits, first time home buyers credit against the tax, and tax changes regarding Real Estate Investment Trusts and Health Care REITS.

    The bill, which is now law, is now being interpreted by the various agencies designated to carry out and enforce the legislation.  These series are only a snapshot of the the true scope of the law.

Resources:  http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h3221eas2.pdf

http://www.fha.com/

http://www.hud.gov/

Tags: Housing Bill, SAFE Mortgage Licensing Act

This entry was posted on Tuesday, August 12th, 2008 at 5:51 pm and is filed under Financing, Legislation, The Housing Bill. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.