New Housing Coalition Could Impact Foreclosure Rates

[Nov 11, 2007.]

 

The White House has now introduced a new mortgage industry coalition which could help homeowners to avoid foreclosure. The coalition is designed to assist those 2 million homeowners with adjustable rate mortgages who could otherwise be priced right out of their homes. That's because the introductory low rates are about to reset to much higher interest rates.

Recently, Congress approved legislation which would establish a federal trust fund to help finance affordable housing. The aim is to build some 1.5 million affordable housing units over the next 10 years. The fund would be financed with money from mortgage giants Fannie Mae and Freddie Mac.

However, the President has said he would veto the bill. President Bush states that the Department of Housing and Urban Development already has a program aimed at attacking the affordable housing problem.

Meanwhile, the new mortgage coalition includes nearly a dozen companies representing the majority of mortgages in the U.S. The coalition also includes counseling agencies, trade groups, and investors. The project is called HOPE NOW and is designed to give new hope to homeowners who are crestfallen as a result of the housing crisis.

In the meantime, Democratic leaders are saying that the initiative is not strong enough to address the problems caused by the current housing crunch. The National Association of Realtors predicts that sales of existing homes will decrease 10.8% in 2007 - that's a larger drop than had been previously predicted.

Sen. Charles Schumer, a Democrat of New York, stated, "Unfortunately, the bottom is falling out of our housing market much more quickly than the administration is willing to stem the tide of foreclosures."

The housing crisis is not expected to be alleviated until the middle of next year. While that offers the prospect of hope for prospective homebuyers, it may be too late for those who are already having difficulty managing their monthly mortgage payment.

Julie Ann Amos
November 11th 2007

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