Congress Overwhelmingly Passes Landmark "Helping Families Save Their Homes Act"May 19, 2009

WASHINGTON, D.C. By a vote of 367 to 54, the House of Representatives today passed the "Helping Families Save Their Homes Act," a bill that takes bold steps to protect American homeowners and reinvigorate the housing industry.

"Before we can set the housing market back on a path to good health, we have to stop the bleeding by preventing future foreclosures," said Congressman Lincoln Davis. "This bill takes us in that direction."

Among other provisions, today's legislation would expand the authority of the Federal Housing Administration (FHA) and the Rural Housing Service (RHS) to engage in foreclosure prevention in their respective single family loan programs, by allowing for both FHA and RHS the following new tools:

• Partial Claims. Permits partial claims of up to 30%, which will allow reductions in debt service down to levels affordable to the homeowner
• Standard for loss mitigation. Permits loss mitigation tools to kick in for loans that face "imminent default" (i.e., not just loans in default)
• Assignment Authority. Gives both FHA and RHS authority to facilitate loan modifications through assignment of loans, to address servicer loss mitigation disincentives relating to having to purchase loans from Ginnie Mae pools

Additionally, the bill authorizes the Secretary of Housing and Urban Development (HUD) to implement a program solely to encourage loan modifications for eligible delinquent mortgages through the payment of insurance benefits and establishes the Nationwide Mortgage Fraud Task Force to address mortgage fraud in the United States.

"This legislation has strong bi-partisan support, and will go a long way towards helping American families stay in their home, whether they live in big cities or rural areas like the ones I represent," said Davis.