Senate Votes to Aid At-Risk Homeowners

Bill, approved 93-1, would allow feds to back refinanced loans
By Zach Samalin,  Newser Staff
Posted Dec 14, 2007 4:44 PM CST
Chart shows percentage of foreclosures starts for subprime, FHA, VA, prime and all loans, percentage of seriously delinquent loans and subprime adjustable-rate mortgage forclosure starts; 1c x 3 1/8 inches;...   (Associated Press)
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(Newser) – In an attempt to quell the ongoing housing crisis, the Senate approved a bill today that would allow the Federal Housing Administration to back refinanced loans for the thousands in danger of defaulting on mortgages. The bill, which passed 93-1, also repositions the FHA as an attractive alternative to subprime lenders by lowering minimum down payments and offering homeowner counseling.

The bill would give homeowners "the option of refinancing to an FHA-backed loan with the peace of mind that comes with it," said Sen. Harry Reid, while also raising the maximum mortgage the FHA can insure, the Associated Press reports. The agency should "be a source of salvation for those families … tricked into unaffordable loans," said Sen. Charles Schumer.