June 17, 2008


WASHINGTON, DC – Today, Senators Chris Dodd (D-CT) and Richard Shelby (R-AL), Chairman and Ranking Member of the Senate Committee on Banking, Housing and Urban Affairs, announced that they have completed bipartisan legislation that includes major efforts to address the housing crisis.  By providing relief to hundreds of thousands of American homeowners and introducing broad improvements to the nation’s housing system, the legislation will help to contain the current problems in the housing markets and prevent another crisis of this magnitude. The Senate may begin debate on the bill as soon as today.  
“Americans are looking to Congress to deliver solutions to the housing crisis, which has forced millions of homeowners to file for foreclosure, reduced home values for millions more, crippled the mortgage markets, and significantly weakened the American economy,” said Dodd.  “Senator Shelby and I have worked together to create legislation that will provide relief to hundreds of thousands of Americans who are struggling to keep their homes, as well as countless homeowners and communities who are already experiencing the devastating effects of foreclosure.  In addition, this legislation takes important steps toward restoring safety and stability to the housing markets, and reforming our housing system so that the American dream of homeownership is preserved for future generations.  It is time to put politics aside in order to help Americans regain their financial footing and put the economy back on track.  I look forward to the Senate’s consideration of this bipartisan effort, and encourage my colleagues to support this legislation.”
“Chairman Dodd and I worked diligently to craft a comprehensive housing package that can be signed into law expeditiously,” said Shelby.  “Taken together, these measures will provide needed stability to our housing markets and the economy.  In particular, I am pleased that we included significant protections for the American taxpayer through meaningful GSE reform, and by ensuring that taxpayer dollars will not be used to fund the HOPE for Homeowners program.  I look forward to working with Chairman Dodd and my colleagues to move this measure forward quickly.”    
The comprehensive housing legislation contains provisions from a Dodd-Shelby bill that was approved by the Committee on May 20th, as well as measures from the Foreclosure Prevention Act, which passed the Senate in April.  The legislation to be considered contains the following provisions:
  • The HOPE for Homeowners Act: Creates an initiative within the Federal Housing Administration (FHA) to prevent foreclosures for hundreds of thousands of families at no estimated cost to American taxpayers.
  • Affordable Housing Fund: A permanent, new fund that will help create more affordable housing for millions for Americans in communities across the country. 
  • Assistance for Communities Devastated by Foreclosures:  To ensure that communities can mitigate the harmful effects of foreclosures, $3.92 billion in supplemental Community Development Block Grant Funds will be provided to communities hardest hit by foreclosures and delinquencies. 
  • Foreclosure Counseling for Families in Need:  To help families avoid foreclosure, the bill provides $150 million in additional funding for housing counseling. 
  • Preserving the American Dream for Our Nation’s Veterans:  This bill contains several provisions to help returning soldiers avoid foreclosure, including lengthening the time a lender must wait before starting foreclosure from three months to nine months after a soldier returns from service.
  • GSE Reform: Creates a world class regulator for the government-sponsored enterprises (GSEs) so that these vital institutions can safely and soundly carry out their important mission of providing our nation’s families with affordable housing.
  • FHA Modernization: A provision to modernize, streamline and expand the reach of the FHA, allowing families in all areas of the country to access secure and affordable mortgages through FHA. 
  • Enhancing Mortgage Disclosure:  To ensure that consumers know the exact amounts of their mortgage payments, including the maximum possible payment under the terms of the loan and changes in payments associated with adjustable rate mortgages, lenders will be required to provide borrowers with timely and meaningful mortgage disclosures on all home purchase loans, loans that refinance a home, and loans that provide a home equity line of credit.

A more detailed summary of the legislation is attached.

Click link for the summary of the Housing and Economic Recovery Act

Click link for Bill Language