| Offices : Beckley • Charleston • Fairmont • Martinsburg • Washington, DC | E-mail Senator Rockefeller |
July 26, 2008
MORTGAGE REFORM BILL SENT TO PRESIDENT TO BE SIGNED INTO LAW
~Rockefeller Supported Legislation that Will Help West Virginia Families and Veterans Refinance Mortgages and Communities Redevelop Foreclosed Properties~
WASHINGTON, D.C – In a rare Saturday session, the Senate voted to pass the Foreclosure Prevention Act. Senator Jay Rockefeller voted for the bill that aims to address the foreclosure crisis gripping the nation, while also helping West Virginia families and veterans stay in their homes and rebuild neighborhoods that have a surplus of vacant property.
“The dream of homeownership shouldn’t turn into a nightmare of unpredictable interest rates and declining home values. This bill has the potential to bring real peace of mind to those West Virginia families that are struggling to keep a roof over their heads,” Rockefeller said. “It’s equally clear that mortgage lenders should have been more carefully regulated all along. At this point we need to do everything that we can to keep institutions like Fannie Mae and Freddie Mac strong and solvent. They are incredibly important to our state and helped thousands of hard working families own homes.”
To help keep struggling families in their homes, the Foreclosure Prevention Act provides additional federal funding for housing counselors, offers new options for homeowners to refinance out of subprime loans, and allows returning veterans more time to make mortgage payments and one-year relief from increases in mortgage interest rates.
The bill also provides billions of dollars in additional funding for the Community Development Block Grant (CDBG) that states and local communities can use to purchase foreclosed properties from lenders that can be resold or leased to families. By reducing the number of vacant homes in a neighborhood, existing homeowners will see their property values remain the same or increase.
The bill also provides an additional life of secured government credit for the mortgage giants Fannie Mae and Freddie Mac. Over the last decade, Fannie Mae and Freddie Mac have invested billions of dollars in West Virginia that have gone to help hard-working families realize the dream of homeownership. As a result, homeownership in the state is higher than the national average.
Finally, to prevent a future mortgage crisis, the legislation improves the disclosure of information given to borrowers when they receive a mortgage or refinance, enabling them to make better, more informed decisions about their loans.
The Foreclosure Prevention Act includes a number of important tax relief provisions aimed at shoring up the ailing housing market. These include: a federal standard property tax deduction for West Virginia homeowners that don’t itemize; increased bond authority to allow municipalities to refinance subprime loans and provide mortgages for first-time homebuyers and multifamily housing; and extension of the Net Operating Loss (NOL) carryback to help aid homebuilders and businesses hit hardest by the economic slump; and, a $7,000 tax credit for the purchase of a home already in foreclosure.
Lastly, the legislation also includes tax legislation that Senator Rockefeller introduced last year dealing with Federal Home Loan Banks (FHLBanks). FHLBanks provide low-cost funding for affordable housing and community development projects to financial institutions in West Virginia. Rockefeller’s tax provision helps municipalities by temporarily allowing bonds that are insured by FHLBanks to be eligible for treatment as tax-exempt bonds, helping State and local governments obtain financing for infrastructure projects at a lower cost.
The bill now goes to President Bush who is expected to sign it into law next week.
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