Senate-Approved Mortgage Legislation Moves to the House

WASHINGTON — The Foreclosure Prevention Act of 2008 was passed in the Senate on April 10 by a vote of 84-12 following discussions by Senators Chris Dodd (D-Conn.) and Richard Shelby (R-Ala.) on its provisions, resulting in a bipartisan effort to gain wide support.

The legislation aims to both streamline and expand the reach of the Federal Housing Administration by raising the limits on the size of loans the FHA can insure; provide counseling to Americans facing foreclosure; enhance mortgage disclosure requirements; provide $4 billion to state and local governments for the rehabilitation and resale of abandoned and foreclosed homes via the Community Development Block Grant Program; provide community development block grants to buy abandoned or foreclosed properties; allow tax-exempt bonds to refinance subprime loans; and provide a $7,000 tax credit for those who purchase homes in foreclosure. The bill also allows businesses that lose money in 2008 and 2009 to get refunds of taxes paid over the past four years, rather than just the past two years, which is the case under current law.