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Washington, DC -- In response to the growing subprime mortgage crisis, Congressman Zack Space (OH-18) voted today for legislation to help stabilize the mortgage market. The Expanding American Homeownership Act increases the market share of mortgages insured by the Federal Housing Administration (FHA), encourages greater stability in the mortgage market in coming years, and creates identification requirements to prevent illegal immigrants from receiving these benefits. This legislation passed with bipartisan support by a 348 to 72 margin.
The Expanding American Homeownership Act raises loan limits for FHA-backed loans, boosts loan limits in high-cost areas, allows the agency to vary the premiums it charges borrowers based on their credit risk, modifies disclosure requirements to provide more information concerning mortgage choices, and allows for lower monthly payments for borrowers who make on-time payments for the first five years of a loan. It also extends the maximum loan term on FHA single-family loans to 40 years from 35 years.
“This legislation is a step in the right direction toward righting the problems of our nation's current housing market,” Space said. “Instead of borrowers turning to predatory lenders who are looking to profit off of others' misfortunes, families can finance their mortgages through the FHA. The FHA can serve subprime borrowers at better rates and provide fairer mortgage opportunities than predatory lenders. FHA mortgages are a safer bet and could prevent foreclosure in many cases. I am also very pleased this legislation contains provisions to make sure legal Americans are the only people who can take advantage of this program.”
Congressman Space has also introduced legislation aimed at greatly reducing the “foreclosure tax” families must pay after going through the trauma of losing their homes. The Foreclosure Tax Relief Act was introduced earlier this month and includes a number of provisions to prevent abuse of this program:
This exemption would only be available to taxpayers with adjusted gross income up to $100,000 or $200,000 when couples file jointly.
It would only allow taxpayers to exclude up to $50,000 in forgiven debt.
Middle-class foreclosure tax exclusion only applies to first mortgages.
The exclusion must be for a family’s primary residence.
This provision would only be in effect for Tax Year 2007 and Tax Year 2008 in order to allow the Treasury Department to evaluate the effectiveness and cost of the provision.
“The combination of these two pieces of legislation will go a long way in reducing the impact of the mortgage crisis we are currently facing. Providing safer loans and reducing the burden on families facing financial crisis is a comprehensive approach that will benefit Americans attempting to keep the dream of home ownership alive,” Space continued.
Congressman Space represents Ohio’s 18th Congressional District. Elected in 2006, he is working to restore integrity to the office, expand Ohio’s economy, and support renewable energy.
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