Some Democrats Pushing For Mortgage Assistance Bill
After nearly a decade of trying, Democrats will again push for legislation this year establishing an assistance program to help families on the verge of foreclosure make their mortgage payments for up to three years.
The program, which according to Inman News, would apply only to government-insured mortgages such as VA-backed loans and FHA home loans, would allow borrowers to keep their homes by making monthly payments not to exceed 35 percent of their incomes.
The government would cover any additional amount owed to lenders for up to three years, at which time those receiving assistance would be expected to resume making full mortgage payments.
Beneficiaries would be required to repay the program for the assistance they received, plus interest.
Attempts to establish the program under the authority of the Department of Housing and Urban Development date back to 1998, when Rep. Luis Gutierrez, an Illinois Democrat representing parts of Chicago in Congress, introduced the Homeowners’ Emergency Mortgage Assistance Act, or HEMA.
The bill had no co-sponsors and was promptly referred to the Subcommittee on Housing and Community Opportunity and never heard from again.
When Gutierrez reintroduced the FHA mortgage-friendly bill again the following year as HR 595, it gained the support of 56 co-sponsors, including Democrats Nancy Pelosi of California and Barney Frank of Massachusetts.
Pelosi is now Speaker of the House, and Frank is chairman of the House Committee on Financial Services. But in 1999, with Republicans in control of Congress, the HEMA bill was once again referred to the Subcommittee on Housing and Community Opportunity, where it died.
It would be four years before Pennsylvania Democrat Chaka Fattah brought it back - or at least a nearly identical version of the mortgage rescue bill, HR 1357. That incarnation of HEMA, introduced in 2003, languished in the same committee as its predecessors.
Fattah said he plans to reintroduce yet another HEMA bill as soon as this week, and his staff is hopeful that this piece of legislation - vital to those seeking an FHA home loan - will finally have the support of leading Democrats, including Pelosi and Frank.
Fattah’s communications director, Debra Anderson, said bill 378 received limited support because Democrats had other issues that were higher priorities - not because those who had supported the bill in the past had changed their stance.
“I would suppose those same people (who co-sponsored previous versions of the bill) will sign on,” Anderson said - including Pelosi and Frank.
Fattah’s legislative director, Nuku Ofori, said there has not been a recent estimate of what such a bill pertaining to these home mortgage loans would cost, which would require funding through a separate appropriations bill. Ofori said that based on a previous estimate, the cost could be $50 million or more.
A spokesman for Gutierrez, the sponsor of the original HEMA legislation, said the Congressman is “definitely supportive” of Fattah’s effort.