The Senate voted overwhelmingly (76-10) to advance a mortgage rescue plan to save hundreds of thousands of homeowners from foreclosure. The plan focuses on a $300 billion FHA program to allow homeowners who are currently considered too risky to qualify for government-backed loans to refinance into safer, more affordable mortgages.
The number of “yes” votes means that the bill would escape a veto from the White House. With this in mind, the White House is trying to work out a compromise with the Senate – specifics of a compromise are still not clear.
It is also not clear whether the package will clear the House. One issue that has not been agreed on between the Senate and House focuses on the limits on the mortgages FHA can insure and Fannie Mae and Freddie Mac can buy. The Senate measure caps the limits at $625,000 while the House version would impose a cap of $725,000. Those kind of caps, to me, are crazy. According to a report in the NY Times, the the median home price is $220,000. What kind of lenders are handing out loans to homeowners in excess of $625,000 without verifying ability to pay? I just don’t get it. Apparently, 76 members of Congress do.
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Since I was priced out of the housing market years ago, this is one of the few situations I will be glad to benefit from the ineffectiveness of our Government.
Maybe they’re looking at Cali? Median prices are way higher here. But, yeah, they should’ve been a little more careful about qualifying people. As it is, I don’t stand a chance to buy a home here. And I don’t want to subsidize others getting in over their heads.
I am so glad my husband and I scrimped and saved and got ourselves crammed into this tiny little house we could afford, so that our tax dollars could help others live in $600,000 homes without having to sacrifice the way we did. (/sarcasm)