Financial Services Committee Approves Foreclosure Bill As Job Losses Continue

Speaker Nancy Pelosi:

"Today's jobless numbers, combined with slowing consumer spending and nearly flat wage increases, are additional evidence of the need for Congress and the President to work in a bipartisan way on additional steps to get our economy back on track.

"Many Americans fear losing their jobs, many fear losing the homes; and most everyone is worried about losing their standard of living. The New Direction Congress has responded by passing Recovery Rebates, which millions of families are now receiving.

"We will soon act on comprehensive housing legislation that provides the most assistance to Americans of any plan yet to help them refinance and keep their homes. We should also extend unemployment insurance for Americans whose benefits will soon expire and offer additional food stamp assistance to families struggling with rising food costs. We are also calling on the President to act to combat record gas prices by halting the filling of the Strategic Petroleum Reserve.

"We urge the President to work with Democrats in Congress to speed economic recovery and to provide critical relief to American families."

Financial Services Chairman Barney Frank:

"Today's report on the April job numbers confirm that the economy remains in deep trouble. We must act aggressively both to address the growing foreclosure crisis that is at the root of this recession, and to provide further stimulus to the broader economy. While some are relieved that the report was not worse, there is no relief for hard pressed families. Almost 300,000 Americans have lost their jobs since the first of the year and over 5 million others are working part time because they have been unable to find full time work.

"Yesterday, the Financial Services Committee completed work on a major foreclosure prevention bill that will be considered by the full House next week. Fast Senate action and a Presidential signature are vital.

"We should also act quickly to enact a second stimulus package that includes aid to cities and states that have been collateral victims of the foreclosure crisis, seeing tax revenues decline as millions of vacant homes line our streets. American families need our help as well, and the package must include an extension of unemployment benefits and increases in safety net programs."

Read a full explanation of the legislation from the Committee >>

House Panel Approves Bill to Assist Borrowers

David M. Herszenhorn, New York Times - May 2, 2008

The House Financial Services Committee pushed forward on Thursday with an aggressive effort to help troubled homeowners, approving legislation that would make up to $300 billion in federally insured loans available to refinance the mortgages of borrowers in danger of foreclosure.

With passage of the House bill virtually assured, debate over how best to address the downturn in housing shifts back to the Senate, where Democrats drafting a similar plan are struggling to overcome the reservations, if not outright opposition, of a more robust Republican minority.

President Bush has called on Congress to pass very specific legislation to update the operations of the Federal Housing Administration, to tighten regulation of the government-sponsored financiers Fannie Mae and Freddie Mac and to let state and local housing authorities use tax-exempt bonds to refinance bad loans. But he opposes the more expansive legislation pursued by Democrats.

The Financial Services Committee approved the bill 46 to 21, with 10 Republicans joining the Democrats in favor of it.

Representative Barney Frank, Democrat of Massachusetts and the chief author of the housing legislation, said Thursday that he hoped President Bush would sign the bill if it reached the White House as part of a wider package and it contained the legislation that Mr. Bush had demanded.

The Democrats' legislation seeks to help homeowners by requiring lenders to reduce the principal balances for borrowers at risk of default. The bad loans, typically with high adjustable rates, would be refinanced into more affordable 30-year fixed-rate loans insured by the F.H.A.