Senate Banking Committee Approves Plan to Stem Tide of Foreclosures and Create Affordable Housing

WASHINGTON, DC -May 20, 2008 – The Senate Banking Committee today gave its stamp of approval to the Federal Housing Finance Regulatory Reform Act of 2008.  This legislation will create and permanently fund a program to build and preserve affordable housing; allow an estimated 500,000 families to refinance into 30 year fixed mortgages with FHA mortgage insurance without placing any burden on taxpayers; and strengthen the oversight and regulation of Fannie Mae and Freddie Mac. 

U.S. Senator Jack Reed (D-RI), a senior member of the committee, authored several key provisions in the bill, including the GSE Mission Improvement Act, and played a critical role in helping to get it passed through committee.

“I am pleased we were able to reach a bipartisan agreement to create more affordable housing, help people keep their homes, and strengthen the regulation of Fannie Mae and Freddie Mac” said Reed.  “I have been working on creating an affordable housing fund for years.  It is important for families to have access to affordable housing, and that’s why I’m pleased that today’s compromise will set aside new money to build affordable housing in all fifty states.”

Nearly 3,200 Rhode Island homes were noticed for foreclosure over a one-year period from May 2007 to April 2008.

The Federal Housing Finance Regulatory Reform Act of 2008 includes the Hope for Homeowners Act, which will allow families to refinance into 30 year fixed rate, affordable mortgages with Federal Housing Administration (FHA) mortgage insurance; Reed’s GSE Mission Improvement Act, which will dramatically enhance Fannie and Freddie’s affordable housing mission by providing $500 to $900 million a year for the production and preservation of affordable housing and strengthening their commitment to buying affordable mortgages; and create a stronger regulator for Fannie Mae and Freddie Mac.

“Today’s housing crisis is the result of market failure and federal government disinvestment in housing assistance for working families.  This bill is a broad-based solution that will help American families around the country get access to decent and affordable housing” concluded Reed.

The bill was approved in the Banking Committee by a vote of 19-2.

Now that it has passed through committee it must be taken up and considered by the full Senate.