Housing: Bankruptcy Cramdown/Judicial Modification Amendment in Financial Regulation bill; Frank okays CBC Amendment for 3 billion in loans to unemployed homeowners, also allows HUD to fund states’ HEMAP programs…
Lots of action taking place ahead of the House vote on Financial Regulatory Reform. Much of it focused on housing.
Responding to concerns from the Congressional Black Caucus, House Financial Services Committee Chairman Barney Frank has attached a provision to broad bank regulation reform legislation that would allocate $3 billion in bank bailout funds to help unemployed homeowners stay in their homes. The provision is expected to be included in major bank reform legislation, which is set for three days of consideration by the House of Representatives beginning Wednesday evening.
…The House Rules Committee is scheduled to debate and decide which amendments will be permitted to be considered on the House floor at meetings Tuesday and Wednesday. Read amendments here.
...Frank agreed to allocate $3 billion in additional funds from the $700 billion Troubled Asset Relief Program for emergency mortgage relief for unemployed homeowners. Already $50 billion in TARP funds is being used for an Obama administration mortgage modification program.The measure would allocate the funds to the Department of Housing and Urban Affairs, which would use the funds to give out fixed-rate, low-interest loans to unemployed people facing foreclosure. However, the aggragate amount of assistance for any homeowner is prohibited from exceeding $50,000.
The program also allows the HUD secretary to allow funds to be administered by a state with a similar program. For example, HUD may have authority to provide TARP funds to the Pennsylvania-based Homeowners’ Emergency Mortgage Assistance Program, or HEMAP, which gives government bridge mortgage loans to people who have recently lost their jobs. Under HEMAP, loans do not accrue interest until the participant’s income is restored.
Frank also attached a provision that would provide an additional $1 billion in TARP funds for an existing neighborhood stabilization program…
Go read the whole piece for more on the bankruptcy cramdown amendment, which may face better odds in the Senate this time around given the failure of the HAMP program and the imminent second leg down in housing.