Housing Bill Gets Thumbs Up From House Financial Services Committee

Washington, D.C.–The House Financial Services Committee approved the bill designed to help troubled homeowners–which would allow the Federal Housing Administration to guarantee to $300 billion in new mortgages–on Thursday, CNN.comreports.The committee passed the bill with a vote of 42 to 21; the entire House should weigh the measure next week.Democratic House Financial Services Committee members shot down several Republican amendments on Wednesday, including proposals to limit the program to low- and middle-income borrowers and to exclude homeowners with poor credit. Homeowners would need a mortgage-debt-to-income ratio of 35 percent or higher to qualify; their lender also would have to agree to take a loss and accept a payment that was 85 percent or less of the home’s value.If the house was sold, the government would reap a share of the profits, and the government would have to pay only if homeowner defaulted.One to 2 percent of the new loans likely would default, according to Financial Services committee estimates, which would cost the government $3 to $6 billion.The committee says the program could help 1.5 million homeowners who are having a hard time making their mortgage payments.