Reaching out to hard-hit borrowers in the subprime-mortgage market, the House on Tuesday passed a bill that lowers down payments for borrowers, raises loan limits and boosts funds for housing counseling. Passed by a vote of 348 to 72, the bill reforms the Federal Housing Administration and is the latest lifeline thrown to borrowers from Washington as the fallout in the mortgage market continues. About two million loans are expected to reset to higher rates in the next two years, with defaults expected to follow. Congress and the White House have floated various proposals to stem the damage. The bill directs up to $300 million a year into an affordable housing fund. A motion offered by Rep. Jeb Hensarling, R-Texas, to kill the fund was rejected. http://www.marketwatch.com/news/sto...F8-6937-4ABB-BE4D-91DFE996EDBC}&dist=hplatest
This is really a lending institution bailout measure. It supplies them with buyers for their repos... what else is new?? Lower down payments for borrowers with good credit means they will be grabbing up the inventory dumped on the market by the subprime house flipper crowd. I wonder who actually gets the $300 million?
FYI FHA is gov. backed subprime program for people who do not qualify for conventional financing. It was reduced to 3% of the market when the secondary subprime market was robust. "The program should remain targeted to traditionally underserved homebuyers, such as low- and moderate-income families," the White House said in a statement on Monday. Prime borrowers can still get 100% loans.